Blog Post

Buying at auction for the first time...

Publish Date: 22 November 2023

By Jade Shrubsole

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Buying at auction for the first time can be an exciting but also a daunting experience. Here are some top tips to help you navigate the process successfully:

Research Extensively:

Start by researching the property market in your target area. Understand property values, local market conditions, and recent sale prices to help determine your budget and what similar properties are selling for. The Essential Information Group website has details on over 35,000 lots coming to auction each year, and over 1 million past properties for you to see what past lots sold for. The online tools also allow you to see sale prices and trend analysis for a given postcode area. (Online Tools)

Attend Auctions as an Observer or watch online:

Before bidding, attend a few auctions as an observer to familiarise yourself with the process. This will help you understand how auctions work and what to expect. A list of future auctions is available here.

Set a Budget:

Determine your budget, including the maximum amount you're willing to bid, and stick to it. It's easy to get caught up in the excitement and overspend. For the vast majority of lots there will be additional fees to pay on top of the purchase price.  These include Stamp duty, buyer’s administration fee, and other costs and fees listed in the Special Conditions of sale. It is particularly important that you read and understand these clauses and have a solicitor to check them as well.

Get Pre-Approved for Financing:

Arrange financing and get pre-approved for a mortgage or have funds readily available. All auctions require a deposit on the day of the auction and full payment within a specified timeframe. If you need bridging finance, we recommend speaking to a company who are familiar with the auction process, Together are a well known finance company in the industry. 

Conduct Due Diligence:

Research the property you're interested in. Inspect it and obtain any available reports or documents. Be aware of any potential issues or repairs needed. (Research the history of the property using EIG online tools).  Remember that when you register to bid you will be confirming that you have read and understood the legal pack, inspected the property and satisfied yourself as to the condition of the property, and that generally the vendor and/or auctioneer will not be liable for and issues of whatever nature you might discover after the auction.

Understand the Auction Rules:

Familiarise yourself with the auction rules and terms and conditions. Different auctions may have varying rules and requirements, so ensure you know what is expected. 

Register in Advance:

Register as a bidder before the auction starts. This often involves providing identification and proof of funds or financing approval. Do not leave this until the day of the auction as you may be too late by then.

Understand the Guide & Reserve Price:

The reserve price is the minimum price the seller is willing to accept and that the auctioneer is permitted by the vendor to sell at. If the bidding does not reach this price, the property may not be sold. The guide price is only an indication as to where the reserve is currently set, and not necessarily the auctioneer’s expectation as to what it will sell for. (Guide Price explained)

Seek Professional Advice:

Seek advice from the auctioneer and a legal advisor. They can provide valuable guidance.

Read the Legal Pack:

Reading the legal pack is essential, ask a solicitor to look over anything you are unsure of. Take care when reading the special conditions as the vendor can add in extra terms or fees that the auctioneer may not be aware of. (What to look out for when reading a legal pack)

Stay Informed:

By keeping up to date with the current auction market, by subscribing to EIG you can setup an auction alert, you will then be emailed as soon as property comes on the market that matches your criteria. (How to set up an Auction Alert) 

Remember that buying at auction can be competitive, and there are risks involved. It's important to be well-prepared and informed to make the best decisions for your specific situation. By using EIG as a tool to research a property’s history, you can save on errors that could have amounted to thousands of pounds.