Auction finance allows you the opportunity to find the property that is right for you. At MFS, we help our clients ensure that their purchase runs smoothly and meets all the tight deadlines associated with buying at auction. Our process is simple and provides you with a bespoke bridging finance service that is tailor-made to suit your financial needs.
Interested in finding out more about what to expect when you get to the auction house?
Looking for more information regarding what happens after the hammer goes down?
Download our helpful, how-to Guide to Property Auctions today to find some pro-tips to start your auction adventure.
Looking to work out your maximum bid? Our bridging loan calculator can help.
Quick and simple to use, our bridging calculator will provide the potential interest rate, charges and any other costs you may need to be aware of.
To complete a property purchase at auction, including commercial property, the buyer must pay for the property within a certain time frame, often 28 days. Obtaining a mortgage from a high street lender is often impossible under such strict time constraints.
An auction finance bridging loan, which can be known in some circumstances as an auction loan or auction finance, is the ideal way to raise the finance required quickly.
We are experts in auction finance bridging loans. Unlike other lenders, we underwrite from day one. Meaning we’re able to find solutions for potential complex scenarios before they arise, reducing the risk that your transaction would not complete.
You may wish to purchase an asset via an auction house, as property auctions can be a great place to find old or unusual buildings that hold great potential to:
Whether you’re looking to rent out the asset or refurbish the property to sell on at a later date, we’re here to help. Purchasing auction properties do hold an element of risk but there are plenty of positive reasons why you should consider purchasing a property by auction:
If you’re looking for a fast investment in a short timeframe property auctions are a great option. Auction houses often require a completion within 28 days. This means that, more often than not, buying at auction is a faster route than buying via a realtor.
Finance for auction properties in the form of a bridging loan can be with you in as little as three days. Finance for auction properties in the form of a bridging loan can be with you in as little as three days.
A good way to utilise properties bought at auction, is to rent them as a single-use dwelling. Alternatively, you could also convert the building into a House in Multiple Occupation (HMO). This would then provide a monthly income that could cover any maintenance fees or wear-and-tear damage from tenants.
These properties can sometimes require a vast amount of renovation work. The act of refurbishing a property can raise the house value and help entice buyers, making it a quick resale job for the investor.
As the winning bidder, you will need to provide a deposit to hold your property. This is often 10% deposit of the value of the proceeds, however this can change depending on the auction house.
After the deposit is paid, you will then enter a completion period to complete your auction purchase. This is 28 days on average. Our auction bridging loan can provide you with the necessary funds to complete your property purchase, within the allotted time frame.
Online auctions work in a very similar way to in-person auctions. Generally, the key difference is often the bidding period. For example, the online auction site could have a timed bidding period that extends to 30 days. Within this time slot, potential buyers may be able to bid 24 hours a day. At the end of the 30-day period, the winning bidder would need to pay a deposit to guarantee the property
The average deposit charged by auction houses is 2.5% (+ VAT) of the property bid, however this may vary depending on the auction house.
Here are a few things to keep in mind when you’re looking at buying property from an auction house:
Buying at auction can be a great way to get the property you want, and often at a competitive price. However, you may wish to invest your free time before the auction day researching the type of property you want. This way, when you come to looking through auction catalogues, you’ll have an idea of the type of property you are looking for. It could also help you decide which auctions are worth your time attending.
This is the most important aspect. Confidence in your financial situation and knowing how much you have available to you, is a great starting place. If your finances are in place before the auction, it could decrease the risk of the purchase falling through; which may put you at risk of losing your property and deposit.
This is where MFS comes in. We’re here to help make the purchasing experience as simple and smooth as possible. Our underwriters are on hand to do all the heavy lifting and help ensure everything is in place. From liaising with solicitors, valuers and ensuring all required paperwork is completed, our team work in a prompt and professional manner so that you are able to purchase your property with minimal worry.
One thing you should keep in mind is there is always a reason why a property is at auction, and it is left to you to find out what that reason is.
Understanding what issues come with a property means that you can take this into consideration when bidding. This way, you can be ahead of the game and prepare your finances well in advance, taking into account the potential costs that you may need to fund.
We’ve listed below some potentially questions that you may want to consider:
From how-to guides surrounding our products to uncovering our research reports – find everything you need here
Our Buy-To-Let Mortgage product is here to help you find your specialist financial solution.
Whether you’re a first-time landlord looking to start your journey, or a seasoned investor purchasing your next HMO, we’ve got you covered.
