40% would consider buying home at auction

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by Kay Murchie

According to research from Standard Life Bank, roughly 40% of British homebuyers would consider purchasing a property at auction. During 2005, 15,514 properties were sold at auction – a rise of 13% on the previous year.

Buying at auction is becoming an increasingly popular way of purchasing a house. 98% of those questioned thought buying a house at auction would actually save them money.

9% of these think they can acquire a property for 30% less than market value while 48% hope to secure a reduction of between 10% and 30%. In addition, 50% of those buying a house in this way thought estate agents overvalued property and 31% didn’t want to pay fees.

However, the majority of people do not know some of the requirements when purchasing a property at auction. Nearly 80% of buyers are unaware that they are required to put down 10% of the value of the property as a deposit in order to confirm the sale.

A spokesperson for Standard Life Bank commented that it is vital that anyone considering buying a house at auction must get their finances in order first. Many do not realise that if they bid over the market value of the property they may not get a mortgage for the full amount and once their bid is accepted they are legally committed to buy it.

Standard Life concluded setting a price before you start bidding and stick to it.