[W565]What Properties Sold For

The number of residential properties sold at auctions has risen over the past years. With the current credit crunch and interest rate hikes, many homeowners can no longer afford their mortgages and are forced to have their properties repossessed. These recent years have shown that unaffordable interest rates have led to a lot of repossessions and therefore, quite a number of lots have been available for auction. With the continuing high cost of mortgages in the United Kingdom today, more and more homes are put under the gavel to be sold at auctions. The auction house is becoming a popular venue and a quick way to sell properties which have been repossessed.

Repossessions are indeed unfortunate events for the homeowner. The number of repossessed houses has greatly increased and is becoming quite a worrisome trend. Since most of these residences are sold at prices well below market value, this poses encouraging news for the property investor. By purchasing a repossessed home at a property auction, an investor can easily obtain a reasonable property at a bargain price.

Buying at an auction works for many – whether you are an investor building a portfolio or a buyer set on purchasing your first home. The main attraction of an auction is that it is relatively fuss-free. The property can be purchased without going through the tedious rounds of negotiations, as long as the vendor's minimum price, called the ‘reserve' is met by the highest bidder.

In most residential property auctions, prices are usually well below market price. Sometimes, the reason for the rock-bottom prices is something that buyers should be wary about. Some of these houses are in poor conditions, have defects in the legal title, are being occupied by squatters or will be adversely affected by proposed infrastructure or road developments. These are the caveats that first-time home buyers need to be aware of. But for the most part, properties sold at auctions are reasonable and are indeed a good buy.

Most auctioned properties are distressed sales or repossessions, wherein the owner has become financially unable to keep up with the mortgage payments on his property and needs to sell his property to obtain cash quickly. As a first-time bidder at an auction, keep a lookout for properties marked with the words ‘for sale by mortgagee in possession.' This is usually a clue that the house being up for sale is a repossessed property.

It is possible to get good deals at an auction. But of course, one needs to know how an auction operates beforehand. For many, it is best to go to a few auctions as a spectator before actually bidding and participating in one to learn the ropes and pick up some tips. Once you have eyed a property, it is best to lean on the safe side and conduct a survey and legal checks. Though this could initially cost quite a bit of money, this could definitely save you money in the long run.