House prices across England have jumped £49,257 in just five years but cash-strapped buyers may be able to work around the increase by investing on auction.
A two-bedroom home, complete with a garden and two reception rooms is about to go under the hammer with a starting price of just £9,000.
The property in Ilkeston, Derbyshire, is in need of a complete overhaul, but the framework is intact – making it ideal for buyers seeking a renovation project.
The end-of-terrace property is also just a ten-minute walk from the train station and town centre.
It’s due to go on auction next week with a list price of between £9,000 and £14,000.
The property features a reception room, kitchen and dining room, utility room, bathroom, two bedrooms and a back garden. It even has central heating and UPVC double glazing installed.
However its new owners must be prepared to put the work in as everything from its dated carpets to red and silver walls will need renovating.
The biggest project will perhaps be the kitchen and bathroom which both need new fittings.
The house will be auctioned by Bond Wolfe on Wednesday, October 20.
The auctioneer said the starting price is between £9,000 and £14,000.
“Guide prices are always an indication of the reserve price, this being the minimum price the property can sell for,” he told the Derby Telegraph.
“The reserve price is a maximum of 10% higher than the guide price.
“However, the extensive marketing campaign that we put behind our auctions can generate significant interest in a property.
“This can create competitive bidding, with the property selling for way in excess of the guide price.
“In short, the property will be sold for the maximum price that someone is prepared to pay for it on the auction day.
“The minimum price will be up to 10% higher than the guide price.”
There are some incredible savings on offer if you’re prepared to and buy on auction and experts at NAVA Propertymark say it doesn’t have to be complicated.
“If you do your homework, familiarise yourself with the lot you want, the terms and conditions that apply and are clear with your bids, you’re in with a great chance of success and maybe getting your hands on a bargain,” explained James Emson, at NAVA Propertymark.
To begin with, you’ll need to find the auctioneers that are selling properties in the areas you want to buy in.
London auctions have properties in London and the Home Counties, but often also much further afield. Outside London, auction houses are more likely to specialise in local properties.
Once you’ve found an auction house, get on its mailing list for property catalogues.
Next up, research the local housing market to find out roughly how much the property is worth, and decide on your maximum bid accordingly.
The temptation at auctions is to get carried away and bid higher than your maximum.
If you’re worried about this, get someone to bid for you, or bid by proxy, where you authorise the auction house to bid on your behalf up to a specified limit.
The most important piece of advice for those buying at auction is to check the terms of both the auction house and the property before you bid.
The legal documents will detail any significant concerns and should be available to download from the auction house’s website.
Run these via your solicitor as it could affect how much you bid – if you bid at all.
If you’re worried about what the property may look like in real life, you can view the place in advance of auction day.
That’s because if you win the auction, you’ll have to exchange contracts and pay a deposit (usually 10% of the purchase price) and a fee to the auction house immediately.
The full balance of the purchase price will likely be requested within 20 business days.
You may also have to factor in conveyancing fees and stamp duty.
If you pull out of the sale at auction, you could face huge costs, or be taken to court.
The completion date is often four weeks from the date of the auction, but it can vary. If you fail to complete on that date, you could lose your deposit and even be sued by the seller.
For this reason, paying cash is a much safer way to buy property at auction than with a mortgage.