Properties have different purposes. Similarly, they are going to have different kinds of values associated with them. In an auction, interested buyers are always looking for this quality. They would want to buy a home. However, they want to learn what special homes an auction might have for them.
However, you can be smart. You might have already planned to buy a property from an auction before visiting an auction. You may have spoken with property finance providers discussing the auction finance interest rates too. In that regard, this blog is going to help you strategically. Let’s read it and find out more about the home at an auction.
Is there a Need to Go through Property or Real Estate Agents?
There is if you need them. You might have a special requirement for a property. You can trust a real estate agent when you don’t understand complicated property features and terms. On the other hand, businesses might buy a property in an auction through real estate agents to save time and get customised services.
Although these agents excel, they might bring you high-end properties. Without creating a controversy here, some high-end properties come at a good price. If you get in the business of checking the auction out yourself, then you might as well find a cost-effective solution.
What Kind of Properties Can I Get in an Auction?
You can get all sorts of properties in an auction. Yes, there are a few traditional properties that you can spot in the auction ‘more often’. However, before you make your deal, go ahead and run an inspection on the property you have eyed. That said, you can find common properties in an auction and a little information about them below:
- Residential or Commercial Properties that Needs Renovation
Think about it from the perspective of the owner. You have a home, and it exists in a rough condition. It might collapse. Or it might give you problems that are financially difficult for you. In such a circumstance, you would obviously want to sell your home. This is where you contact the real estate agents and speak with them to offer your home on an auction.
Now, think from the perspective of a buyer. You need to buy the home. That’s okay. However, you will come to know the condition of the home. Yes, it might help you get a property in lower investments. Nevertheless, you must run checks compulsorily by construction agents or companies and spend money on necessary repairs or refurbishment.
- Tenanted Properties
In case you want to get benefits by investing for buy-to-let purposes, you can buy a tenanted property in an auction. Again, thinking from the perspective of the homeowner of a rental property, an auction can be a good choice to sell a home quickly and earn money, even if it is tenanted at the moment. If the property selling policy does not collide with tenancy agreements, an owner can easily sell the property to an auction.
As a buyer, you may get the benefits of the tenants if the tenancy agreement states that they can remain tenants, even if the ownership of the property changes. Sometimes, these contracts can be permanent such as lifetime tenancy agreements. You need to check whether the tenants are legally staying on that property. Do not buy a property in an auction with illegal tenants or if there is something murky with the tenancy agreement. You might face complicated and lengthy legal problems in future.
- Commercial Properties
In an auction, the commercial properties do come in a variation. You can use this to your advantage if you want to buy a commercial property and rebuild it. Or you can choose to make long-term investments for it to initiate things such as passive income. Commercial properties include:
- Logistics units
Naturally, commercial properties will come at high prices. In an auction, once the deal is made, you may not be allowed to delay the payment. In these situations, speak to a professional broker organisation to get personalised commercial property finance. You can, in fact, get separate auction finance deals with these broker organisations.
Keep in mind that broker organisations may get you an authentic lender compared to you searching for a lender all by yourself. Also, note that a professional broker organisation is better than an individual broker for data and financial safety (no offence).
- Mixed-Use Properties
These properties help the owner to use them for business and accommodation. Take a hotel, for example. You can use part of this hotel as a residential property to stay in while the rest of the property can help accommodate people and feed them (restaurants).
Of course, mixed-use properties might have a little more complex tenancy agreement. They can be sold with or without tenants. Do make your research on paperwork carefully.
- Unique Properties
Auctions sell properties which are used for different purposes. Take a Windmill, for example. These unique properties at an auction may or may not need renovation and repair projects. Do check about them before you finalise your deal. These properties include:
- Nuclear Bunker
Again, these properties will come with a high price tag. You might need to arrange good amounts of money for the deal. Speak to property finance organisations to help you out.
Properties with Special Needs
Not all properties in an auction will be as good as new. It might be true that new properties are not majorly offered in an auction. However, some of these ‘special needs’ properties might have serious issues to the extent that they cannot be mortgaged. Some of these properties are:
- Properties with structural faults
- Properties that may not be mortgaged (consider a bridging loan)
- Properties in short-leases
- Properties with legal issues
To Conclude: Building Plots and Lands Are Also Found in Auctions
Auctions also offer building plots or lands. You might choose to make your purchase this way. However, you might face extra costs in erecting a building on that land. There is a bright side to it, though. You can make and then use your building the way you want it.
Harry Kane is a financial writer and author who has covered wide topics related to business loans and finance for the last decade. He has been working as the Chief Contributor in finding out deals on various business finance products covered by Thebusinessfunds, a reputed business loan broker firm in the UK. The primary work of Harry is to analyse the loan requirements of various businesses according to their circumstances and affordability. He directly communicates with the loan aspirants and guides them to get the right loan matching their needs. He has a vast experience in finance writing, working with many major business firms in the UK. At Thebusinessfunds, Harry also used to write well-researched blogs covering the financial problems of business loan aspirants and providing relevant solutions. He is a postgraduate with MSc. in Banking and Finance.