Property auctions are attracting many types of buyers because the image of auctions has changed.
In the past property auctions mainly sold properties in poor condition at cheap prices. These properties still appear in auctions, but many buildings for sale are in
good condition and sell for high values to both individual and investors.
TV programs featuring property auctions have educated the public about them and auction houses have been using intensive marketing campaigns to promote their sales. This has resulted in many more individual and first-time buyers attending.
Though many bidders pay cash, there are finance options available. There are several specialist lenders who provide bridging finance for buyers. The full price of property bought at auction needs to be paid between 20 and 28 days after the sale. It can take longer than that to secure a mortgage. Bridging finance is used to complete the sale, and then repaid when mortgage funds are available.
Buyers and sellers like auctions because of the certainty that after a winning bid, completion of the purchase should be straightforward. Once the hammer is down, the seller and buyer will not back down. A frustration associated with buying property outside of an auction is that a lot can go wrong before the sale is completed. After an offer has been accepted, a higher offer may be received, and the seller cancels the original purchaser’s offer. Also, at auctions, there are no buying chains that can delay house purchases.