House Auction: The Quickest Way To Acquire Bmv Properties

The continued rise in repossessions has led to a boom for property auction houses with an increasing number of homes selling at hugely discounted prices. This presents an opportunity for property investors who have set their eyes on bargain properties. Every property investor knows that buying a property below market value is where the real profits are made. By turning to a house auction, you have more chances of acquiring cheap properties below market value that you could then add to your property portfolio.

According to auction analyst Essential Information Group, the number of repossessed homes going under the hammer has nearly increased twofold in the last year as mortgage lenders evict defaulting borrowers and pursue a quick sale, a trend no longer offered by the conventional housing market. Months after great uncertainty in the market, property investors with ready cash to hand have sensed opportunities and are now purchasing properties at house auctions.


Bagging bargains at a house auction

For many people, one of the attractions of buying a property at auction is the quick closing with minimum hassles and paperwork. But its major appeal is often hinged on the opportunity to save significant pounds and turn substantial profits. The reserve price is usually the lowest price that a seller is willing to accept  this is typically set at around 20% less than the propertys value in the open market. According to the National Association of Estate Agents (NAEA), the reserve is met or surpassed in approximately 80% of instances at auction. Moreover, the rising popularity of auctions generally results in higher selling prices.

Auction houses cutting prices

Due to tightening finance and softening property prices, auctioneers have been compelled to slash their prices. Many of them have either demanded reasonable reserve prices or turned sellers away saying prices just need to go down. If youre hunting for a good value property, this presents an excellent opportunity for you. If you find it hard to locate properties with low reserve prices, you can try exploring those sold by organisations such as housing associations, local authorities and building societies.

Why buy below market value

For any property investor, it always makes sense to buy properties below market value. When you purchase repossessed properties  particularly those priced below their real market valuation  you can recover your investment quickly. You can achieve this by purchasing a property as cheaply as possible and reselling it a price higher than its current market value. If you want to achieve higher returns, you may want to consider purchasing from distressed sellers who aim for a quick sale that they will agree to sell their home for a price below market value.

How to find bargains at a house auction

Finding bargain properties at a property auction is possible through a number of steps: get in touch with local auction houses, sign up for auction mailing lists, make sure you have a target area, and do research on previously sold prices for nearby properties on the area.

By purchasing a property at a house auction, you have a higher probability of bagging not only a bargain property, but also higher returns on your investment.

By: Parmdeep Vadesha

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Parmdeep Vadesha is a property investment expert and founder of the largest community of property entrepreneurs on the web who buy below market value properties from distressed homeowners facing repossession, divorce and bankruptcy. He writes a monthly newsletter for over 70,000 property investors worldwide - www.Property-System.com