Get a solicitor to review the pack before auction.
Costs to Budget
Cost
Amount
Purchase price
Your winning bid
Buyer’s premium
0-5% (some auctions)
Reservation fee
5-8% (modern method, non-refundable)
Auction admin fee
£0-1,500
Stamp Duty
Based on price
Survey
£300-700
Legal fees
£1,000-2,000
Bridging finance
If needed
Renovation
If needed
Financing Auction Purchases
Traditional Auction (28-Day Completion)
Option
Details
Cash
Simplest if available
Bridging loan
Fast, expensive, then remortgage
Auction finance
Specialist lenders
Mortgage (difficult)
Rarely completes in time
Bridging Loans
Feature
Details
Speed
Can be arranged quickly
Interest
0.5-1.5% per month
Term
1-12 months
Exit strategy
Remortgage or sell
Fees
Arrangement fee 1-2%
Example Bridging Cost
Bridging Loan
Cost
Amount borrowed
£200,000
Interest (1%/month)
£2,000/month
Arrangement fee (1.5%)
£3,000
Exit fee
£1,000
6-month cost
~£16,000
Factor this into your budget.
Modern Method Auction
Advantage
Details
Longer completion
56+ days
Time for mortgage
More realistic
Reservation fee
Non-refundable but gives time
At the Auction
Bidding Tips
Tip
Why
Set maximum before
Don’t get carried away
Start bid confidently
Show interest
Don’t bid too early
Let others start
Watch the room
Gauge competition
Be clear with bids
Auctioneer must see
Stop at your max
Walk away if needed
What Happens When You Win
Action
Timing
Contract signed
Immediately
10% deposit paid
Same day (often card/cheque)
You’re committed
No backing out
Complete purchase
Within 28 days
If You Win and Can’t Complete
Consequence
Details
Lose 10% deposit
Forfeit
May face costs
Resale difference
Potential legal action
From seller
Damage to reputation
With auction houses
Only bid if you can definitely complete.
Risks and Red Flags
Property Red Flags
Red Flag
Why It Matters
Very short lease
Can’t mortgage
Japanese knotweed
Very expensive to treat
Subsidence
Major structural issue
Flooding history
Insurance problems
Unusual construction
Mortgage difficulties
Access issues
May be unusable
Flying freehold
Legal complications
Failed auction before
Underlying problem
Auction Red Flags
Warning
Concern
No legal pack available
Can’t do due diligence
No viewings allowed
What are they hiding?
Auctioneer pushing hard
May be dummy bids
Reserve not stated
Price uncertainty
Too good to be true
Usually is
Guide Price vs Reserve
Understanding Prices
Term
Meaning
Guide price
Indicative — may sell for more
Reserve
Minimum the seller accepts
Reserve not met
Property withdrawn
Realistic Expectations
Guide Price
Likely Selling Range
£100,000
£100,000-£150,000+
Often sells
10-30% above guide
Sometimes sells
At or below guide
Guide prices are set low to attract bidders.
Finding Auction Properties
Where to Look
Source
Details
EIG Propertyauctions.com
National listings
Rightmove
Auction properties filter
Zoopla
Auction listings
Auction house websites
Direct
Local newspapers
Regional auctions
Major Auction Houses
Auctioneer
Coverage
Savills
National
Allsops
National
Auction House
Regional network
Barnard Marcus
London/SE
SDL Auctions
National
After Winning
28-Day Completion Checklist
Day
Action
Day 1
Instruct solicitor
Day 1
Activate financing
Week 1
Solicitor reviews
Week 2
Raise enquiries
Week 3
Mortgage offer (if applicable)
Week 4
Transfer funds, complete
Common Completion Issues
Problem
Solution
Mortgage delayed
Have bridging backup
Legal queries
Solicitor must work fast
Missing documents
Chase seller’s solicitor
Funds not clearing
Ensure available beforehand
Is Auction Buying Right for You?
Good Fit If
Situation
Why
Cash buyer
Quick, no financing issues
Developer/experienced
Understand risks
Looking for project
Can renovate
Need chain-free
Certainty
Experienced investor
Know the market
Poor Fit If
Situation
Why
First-time buyer
Too risky
Need mortgage only
28-day limit
Don’t understand legal pack
Need expert help
Can’t afford to lose deposit
High stakes
Emotional buyer
Overbidding risk
Summary: Auction Buying Checklist
Before Auction
Task
Done
Reviewed legal pack
☐
Had survey done
☐
Solicitor reviewed documents
☐
Financing confirmed
☐
Calculated max bid including all costs
☐
Viewed property
☐
Registered to bid
☐
At Auction
Action
Note
Arrive prepared
Know your limit
Be ready for fast pace
Traditional auctions
Have payment ready
10% deposit
After Winning
Priority
Action
Day 1
Instruct solicitor, activate finance
Week 1
Progress legal work
Week 2-3
Finalise financing
Week 4
Complete purchase
Auction buying can yield opportunities, but the risks are significant. Do thorough due diligence, have financing ready, and never bid more than you can afford to lose.