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HOW TO MAKE MONEY FROM PROPERTY AUCTIONS
1. Identify undervalued properties
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Property auction zone allows you to search different types of
property in the UK and has links to the land registry and houseprices.co.uk.
By clicking on the land registry icon you will find the average value of the
property in that area. If the guide price is below the average value.
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2. Take a survey of the area
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Once you have identified an area it is essential to view the
property at various times of the day. Along with this conversing with
neighbours will help you gain general impression of the area and highlight
any issues.
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3. Get in touch with local council
planning department
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Get in touch with your local council planning department and
enquire if there are any developments in the area e.g. are there any
compulsory purchase order.
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4. Consult a surveyor
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The next step is to consult a surveyor who will give you an
idea of structural faults and cost of repairs – if too high avoids buying the
property and in any case factor the cost into the price you are willing to
pay.
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5. Search for any issues
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Carry out searches and these can be done freely at your local
council offices or let your solicitors do the work. This can highlight issues
which need avoiding.
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6. Get your finance ready
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Get your finances in order. A deposit of 10% is needed for the
property at the auction. Finance can be obtained from specialist finance
houses and bridging loans are also available (be warned they are expensive!).
Completion dates are typically within 28 days. Ensure you are able to
complete within that time frame or risk losing your deposit or incur interest
charges.
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7. Buy with caution
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When investing in property always buy with caution as the
rental income is not guaranteed e.g. ask yourself, how easily can you get a
tenant into that property?
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8. Order a legal pack
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Order your legal pack from the auctioneer and pass it onto
your solicitor.
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9. Insist on buying property from auction
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In the current market avoid buying property before going to
the auction as you will inevitably end up paying too much.
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10. Don't bid above your range
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When bidding at auction set yourself a target price – don’t go
beyond it, no matter how temping it is! Otherwise you will end up paying in
excess and rendering your homework to determine the target price as futile.
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