Newspaper article The Evening Standard (London, England)

Bidding to Win; It Is Possible to Buy at Auction with a Mortgage. Sara Yates Offers Some Valuable Advice

Newspaper article The Evening Standard (London, England)

Bidding to Win; It Is Possible to Buy at Auction with a Mortgage. Sara Yates Offers Some Valuable Advice

Article excerpt

LONDON properties took nearly 30 per cent longer to sell this spring than they did two years ago, according to Rightmove's House Price Index. Buying at auction allows you to buy or sell and have keys exchanged in 28 days. You can save yourself a packet, too, if you choose right. Get it wrong, however, and it will cost you dear. Here are my top tips on a successful buy: 1 VISIT THE PROPERTY Attend one of the viewings. I didn't. When I bought my second auction property, I'd read the legal pack, seen a floor plan and some old pictures on a website. And the place was tenanted, so how bad could it be if someone was living there? But it was bad. Water damage, dodgy electrics and dilapidated decor greeted me. The renovations swallowed a whole year's rental income. Had it not been for modest house price growth I'd have ended up with a loss. You may not be as lucky.

2 KNOW WHAT YOU ARE BUYING If a bedroom looks really poky or doesn't have any external windows, a room has likely been split to create more sleeping space. If the conversion was done without the freeholder's permission, you will need to pay to convert it back. Factor these costs into your bid.

3 DISCUSS THE PROPERTY WITH YOUR MORTGAGE BROKER You don't have to be a cash buyer at auction. I've funded all my hammer purchases with mortgages. But you do need a good broker. I video a property when I view it and show this to the broker. Together you will agree how much you can borrow and how much it's likely to be worth. The broker should also visit the property and get your mortgage agreed in principle. You also agree a cast-iron limit that you will not bid above. Arrange a valuation immediately after a successful bid. You usually have 28 days to complete. You will lose your deposit if you fail to get the mortgage, or if it takes too long.

4 READ THE LEGAL PACK I am always stunned by the number of people bidding who haven't bothered to read the legal pack. Start with the special conditions and read them carefully, as this is where nasties can lurk.

If in doubt consult your solicitor. Things to look out for include: any outstanding bills you may inherit I've seen an PS80,000 liability in one legal pack; if major works are planned (detailed in section 20 notices), and any extra buying costs. …

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