Photos of an auctioneer's hammer, auctioneer and property

Selecting The Right Property at Auction

You have to be crystal clear with the financial side first.

How do you know the right property when you see it? How do you get the best auction property at the best price? How do you know which property is right for you?

The secret to not paying too much for a property is to accurately calculate all your costs. We'll show you how to do that with our FREE! and easy to use Property Auction Calculator.

Do not even think about bidding before you are 100% sure of all the costs involved. Get our free calculator which takes out the guess work. There are many important costs you need to consider when buying a property at auction. Our free Property Auction Calculator is simple to use - just fill in the figures and everything is calculated for you. We believe an educated bidder is a smart bidder.

Other factors you need to consider are:

Your budget
Costs - all costs - especially ones you may not have considered
Key location factors
Whether the neighbourhood is on the up

Determine your budget

The clearer you are on exactly what you want to invest in, the quicker you will find the house for auction.

You have to first consider what you can afford before you even think of the range of properties and the location of the house on auction.

Generally you will be looking at financing the property with a 15-25% deposit and also you will have the costs of buying, refurbishment etc to get the property in a condition where you can rent or sell it. Get some valuable tips on financing your real estate auction property.

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Don't make the mistake of not knowing the numbers

Don't make the massive mistake of not knowing all the many costs involved at an auction house sale. There are a lot of them and you need to be certain you have covered or eliminated them all.

Don't second guess what they are. Our FREE! and easy to use Property Auction Calculator helps you calculate all the different costs that you must consider when buying at auction.

Visit the property

Visit the property at least twice to determine all the costs involved and use professional tradesman to give you three estimates on any work needed. If you cannot view it, do not buy it.

Use our free calculator as a checklist to cover all the costs involved of buying a property at auction and to calculate your maximum bid. Normally the auction catalogue will indicate the viewing arrangements.

Costs you may not have considered

Examples of costs you may not have considered are major arrears on the property or local authority debts on the property. (see explanation below)

The simple fact is, if you want to make a smart investment decision, if you want to make a profit, you have to buy a property that will give you a profit. Neglecting the costs involved is one way of losing money instead of making it.

Major arrears

Major arrears come into play if the property is rented and the tenants owe an amount of money to the vendor. Once the vendor has sold a property it is relatively difficult for them to get the tenant to pay the outstanding arrears. It is common for the vendor to provide in the contract of sale (Special conditions of sale) a clause stating that the purchaser at auction pays a sum at completion equal to any arrears outstanding. This leaves the buyer in a bad position in that he has paid out in full and has to get the money back from the tenant. The arrears could be uncollectible or might take a lot of effort and time to obtain.

Local Authority debts on the property

When the legal searches are obtained by your solicitor it could reveal a local authority charge against a property. You should be sure that the conditions of sale provide for this. If they do not, reduce your top bid by the amount of this debt as per our free calculator.

You will be surprised at how many costs there actually are. Don't find out the hard way. Be smart about understanding the costs so you can then target the right properties - the profitable ones.

Once you have worked out the exact numbers by using our free calculator you can then look at location and consider buying a house at auction. You'll then be able to make a better decision and have the ability to distinguish between a good deal and a bad one. By completing our easy to use calculator, you take the guess work out of the equation.

Our FREE! and easy to use Property Auction Calculator will give you a very accurate price ceiling to bid up to for a house at auction for both Develop and Sell and Buy to Let strategies and act as a checklist to go through to get all your costs worked out.

What to look out for when choosing location:

Transport links
Schools
Doctors/ Hospitals
Sports facilities
Shops
Restaurants

What to find out when choosing location:

Local Crime rate
Social Mix
Council Tax rate
Rubbish collection
Parking

Is the area on the up?

Sign of skips?
Any new cars?
Any trendy bars, restaurants springing up?
What types of people are buying in the area? Young families? Yuppies?
Do hip people such as artists and musicians have to leave the area because of rising prices? This is a good sign the area is on the up.

An attractive property in a sought after area will ensure both strong rental returns and attract ongoing tenancy. It will also be easier to sell, and sell more quickly.

As you want to benefit from as much capital growth as possible, the first rule is to buy in a growth area. Experts define suburbs located up to 10 kilometres from a city's central business district as likely to be a growth area.

The best strategy is to visit a number of areas to see what they offer.

Have more questions about property auctions? Find answers now:

Don't pay too much for a piece of property. Get a complete checklist of all the costs involved and how to calculate them with our FREE and easy to use Property Auction Calculator We've done all the work for you. You'll know exactly what price you can bid up to at the house for sale auction.