Buying at Auction: Is it worth it?
With the ever popular Butters John Bee auctions attracting many green landlords, I thought it would be beneficial to review the September auction results, to find out if you can actually get better deals at auction. BBC Homes under the Hammer on a daily basis suggests it is the best way to buy property…. Lets see!
For first time landlords, the auction can be a scary place, the anticipation, the competition, the hammer… BANG… you have bought, 10% deposit down. Now, have you really had a good buy?! Or have you chased, competed, got a little carried away and paid slightly too much? There are occasionally exceptional buys, but in my opinion, if you’re new to it all, you’d be better off buying through an estate agent in a controlled fashion. Purely because you have time to view, sort your mortgage, your conveyancing, your diligence, and if you get cold feet, you can pull out with very little/or no financial loss.
I’m not saying that every purchase has to be controlled and through an agent, however if you’re a first time landlord, it’s certainly a good place to start.
Here are a couple of comparisons which suggests why:
September BJB Auction Results
30 Urban Gardens, Wellington, Telford, Shropshire, TF1 1PL – Sold for £82,000
67 The Nabb, St Georges, Telford, Shropshire,TF2 9BT – Sold for £121,000
Estate Agent Sales
34 Urban Gardens, Wellington, Telford, Wrekin TF1 1PL – Sold for £87,000 on the 21st May with DB Roberts
69 The Nabb, Telford, TF2 9BT – Sold for £125,000 on the 5th Jan 2015 with with Nick Tart
Whilst the above reflect in the estate agents favour, I think its also fair to show a couple of positive buys at auction too.
September BJB Auction Results
25 Wrekin Drive, Donnington, Telford, TF2 8DT £113,500
122 Westbourne, Woodside, Telford, TF7 5QN £71,000
Estate agent sales
55 Wrekin Drive, Donnington, Telford, TF2 8DT £127,000 sold on the 12th Dec 2014 with
Warrensway, Woodside, Telford, TF7 5QB sold for £79,500 on the 2nd Mar 2015
It is certainly worth comparing what’s on the open market at the time of going to auction and what the previous auction results have been like. I think the above sold comparables prove there isn’t always the significant difference which people expect. When you factor in the condition that auction properties are typically found in, the circa 10% more you may pay through an agent may be absorbed on bringing the property up to standard.
We’ve been actively helping landlords, friends and family over the past 13 years find good buys when they are about. Keep on an eye out on this blog for “good buys” whether it be at auction, with an agent or online.
