First time purchasing at auction…
Back in March 2023, we listed a four-bedroom mid-terrace property in our livestream auction which required complete refurbishment to bring it back to its former glory. The property is situated in the sought after village of Dilton Marsh with its own local amenities including a primary school, village hall, church, public house and various other shops. The Wiltshire village is centrally located for Warminster, Frome and Westbury and is popular with commuters.
Little was known about the history of the property; however, the previous photographs give you a good idea of the overall condition and each room required a full renovation, so this offered great scope and opportunity for any keen auction purchaser.
The property was guided at £100,000 and after some competitive bidding on auction day, Mr C managed to snap the property up at a figure of £159,000. This was his first time purchasing at auction, so Auction House South West wanted to find out how the process compare to buying through an estate agent. Mr C said ‘The auction process was a lot quicker, and I found the process more efficient and transparent. Whereas estate agents can sometimes be looking to market and sell the property quite hard on behalf of the vendor, I found the auctioneer to be more of a facilitator between vendor and buyer. On viewing I found I had more space to think and consider the prospects of the property and spent less time reading between the lines of the estate agent's sales pitch. This was important when viewing a property requiring this much work, which I felt the auctioneer understood.”
Was the bidding registration straight forward for you? “The overall purchase process was very straight forward and could all be done online. It was good to only have to prove my identity once for example, rather than to multiple parties, using different apps, which can sometimes be the case for standard property purchases.” And how did you find bidding online yourself? “I secured the property online, which was a real positive. I happened to be on holiday in Scotland with my family at the time, so this was perfect for me. I won the auction whilst looking out across a Loch, and just prior to climbing Ben Nevis! I ensured I had a secure Wi-Fi connection to maintain connectivity throughout and preferred clicking a button than having to wave a paddle in an overcrowded room.”
As this was your first time, what wisdom can you pass on to other buyers who haven’t purchased through auction before?
“Thoroughly understand the property value and local prices, and select a property that has predominantly cosmetic issues, rather than structural issues. This keeps the refurb budget manageable, and one can reduce costs further by doing some DIY if required. Selecting a trustworthy builder is the other key area of risk but most are looking to do a good job, so it's more about finding a builder with a compatible personality.”
Great advice! So, what is your onward plan with the property? I bought to renovate and hold as part of a buy to let portfolio. Buying at auction allowed me to acquire the property with a smaller deposit due to it being heavily reduced considering its state, rather than buying a house in an already good condition. And the question everyone wants to know… what were the refurbishment costs? “I spent £45k in total, which included an entire refurb of the house and garden. I intend to hold it; however, it was valued at £290k for the remortgage approx. 6 months after buying it at auction.” Not a bad uplift at all! Would you buy from auction again? “Yes, the whole process was efficient so if another opportunity came up with the right property I would do so again. I would also recommend Auction House South West. The staff were very helpful, pleasant to work with and the platform and process was very efficient.” That’s great to hear! We would agree… but you could say we are a little biased!
Mr C took just 5 short months to turn the property into a beautifully finished family home ready for any family to put their own stamp on it (without lifting a paint brush!).
The property was advertised for rental in July 2023 and after little to no time on the market, it was successfully let for £1,250 per month. Based on the purchase price, that brings in a gross rental yield of over 9.4%! Not a bad return there either!
Auction is a great place to purchase potential buy to let opportunities, either currently let with a tenant in situ or vacant. With a secure purchase process and a short time to completion, landlords can turn their property renovations around swiftly meaning less time with no income being produced.
Congratulations Mr C on your successful purchase and we look forward to seeing you in the auction room again!
