Should You Buy a House at Auction?

Last Updated on April 14, 2022 by Kravelv

It can be difficult to find the funds to purchase your first home, or even to move up the ladder and get the house you’ve always dreamed of. That’s why so many people are looking for ways to save money. This includes building their own home and using a reputable auctioneer Sydney.

But, is it safe to use an auction, should you buy your next home this way?

Additional Risks

The first thing to note is that there are additional risks when purchasing your home at an auction. Many auction houses won’t let you see the inside of the house before the auction. You can drive by and peer in as much as you like, but you won’t be able to assess the condition inside your home.

You also won’t be able to do a valuation/building survey before you’re bidding on the property. This is not an attempt by the auctioneer to trick buyers, the logistics of viewings before auction are simply too complicated.

If you’re not keen or don’t have the funds, to restore a house in poor condition then you should avoid these auctions. You can find auction houses that will allow you to view first, tick to these.

It’s also essential that you look at the rules regarding any transaction. That means understanding how much you need to pay the auction house and how quickly you need to have the funds ready to complete the sale.

Providing you know the rules and have the funds ready using an auction house can be a good idea.

The Benefits

The most obvious benefit is that you’ll save money. Houses are generally auctioned off because people are in a rush to sell them. This is often to do with poor finances. In fact, some houses are being auctioned by banks to recuperate costs after seizing the house. This means they’re only interested in getting their money back, not in the value of the home.

In short, you can get some fantastic deals.

It’s also worth noting that many people avoid auctions, which means you should have less competition for the best houses. In fact, buying at auction can be a great way of picking up a bargain and starting your own property business.

The Disadvantages

The biggest issue is the one that’s already been mentioned, that the house isn’t in the condition you expect it to be. That could mean a lot of bills restoring the inside and poor condition probably isn’t a good enough reason to cancel the purchase.

You should also note that it’s difficult to get a mortgage for an auction purchase. The mortgage company can’t assess the house before the auction and you may not have enough time to arrange the mortgage after.

You should also note that many of the other people bidding against you will be experienced at auction houses. They may know what they are buying or simply force the price up for you because they can.

Proceed with caution and you can get an amazing home.