Bidding for renovation properties at auction
For more information, see the main article about Renovation.
The term ‘renovation’ refers to the process of returning something to a good state of repair. In the construction industry, renovation refers to the process of improving or modernising an old, damaged or defective building.
It is common that buildings requiring renovation work are sold at auction.
Bidding for renovation works can be daunting, and careful preparation should be undertaken to be sure that the project has a chance of being both feasible and profitable should the bid be successful.
It is sensible to sit in on a different auction before attending the auction for the property of interest. This is useful in order to get an understanding for how the process works. The property itself should be thoroughly researched before the auction, to avoid the chances of being surprised by potentially costly issues post-purchase.
The regular conveyancing work should be commissioned in order to check the site boundaries, titles and raise any questions with the vendor’s solicitor. It might be deemed worthwhile to commission a full survey. However, this will all involve a financial investment prior to the auction, which may not result in a purchase, so the process should not be undertaken lightly.
Financial arrangements will need to be in place before the auction, to ensure the required 10% deposit is available on the day of the auction when, if successful, contracts will be signed. The remaining 90% is usually required within 28 days. It will be necessary to check the required payment methods of the auctioneers to ensure compliance.
It is also worth having a ‘ceiling’ amount that represents the maximum figure that will be bid on the property, to avoid getting carried away on the day and committing to a higher amount.
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