House renovation is not just about doing up your own home. It can be an investment for you and your family. Buying cheap properties, renovating them, and selling them for a profit can bring you a quick turnover and healthy ROI. So, where to buy cheap properties? Auctions are a great place for snapping up bargains. Homes have gone under the hammer for as little as fiver in the past. But how do you know if you are buying a good property or if you are simple going to throw money down the drain by renovating it.
House Renovation : Auctions for Astute Buyers
What is very clear here is that if you want to purchase properties for house renovation at auction, you need to know what you are doing. Auctions are a way to become the owner of a home in an instant. There is no lengthy rigmarole involved. But, auctions are not for the faint hearted. As soon as the hammer slams down, you have bought a property, and all the benefits and drawbacks that come along with it.
First and foremost before going to buy a home on a Saturday afternoon, do some research. Go to all the local auction houses, and look at their catalogues. Make sure you add yourself to mailing lists. That way you will know what properties are going up for auction in advance. If you have never been to an auction room before, sit in on a few auctions. There is nothing to stop you sitting in and not even placing a bid.
Look at What is For Sale
By signing up for mailing lists for the various local auction houses, you will be able to get a feel of what is for sale and for what asking price. Things are a lot simpler nowadays that auction houses can communicate with you online. In the past it really was a case of going to auction day and bidding. Nowadays there is normally a window of around a month between a property being put in a catalogue and auction day. This gives you plenty of time to decide which property or properties you will bid on for your house renovation plans.
Before going to auction, you also need to get your finances sorted. Just like getting a mortgage for a standard property purchase, you will need the money to secure the sale. Once the hammer goes down, the property becomes yours, and you will need to pay for it. Normally you will need to pay 10% of the asking price on auction day, and the remaining 90% some 28 days later. This means that you will need to have your finances sorted, including loans or a mortgage. That is unless you are planning to buy homes that sell for just a few pounds!
With all the details of the property readily available in the catalogue before auction day, a lender will have time to carry out its own valuation. They will make a decision as to whether the home is adequate for lending or not.
As homes that go up for auction will be in the auction house property a month or so before the auction, it is very possible to go on viewings. These types of viewing are available in very much the same way as for a traditional home purchase. At these viewings you will be able to see the state of the property, assess the location and the local amenities, and grasp an understanding as to the price it may sell for.
Remember that prices in auction are only guide prices. This means that you need to go prepared. You will need to have enough money with you to pay the 10% deposit. But don’t only have the exact amount. As we said, prices are only guide prices.
Lastly, don’t get carried away. Do not fall in love with any property and do not bid higher than you can avoid. If someone is outbidding you, let them purchase the property. Bidding higher than the price you can afford to pay will only lead you into trouble when it comes to paying the 10% deposit. Do not fall in love with any property and do not imagine yourself living in the house. When you are buying properties for house renovation, keep a level head and don’t listen to your heart.