Buying at auction: do you need a survey?

We've all probably watched those property shows on television that follow buyers from the auction through renovation, to find out how much value they've added in terms of resaleable profit or healthy rental yields.

What comes out of those shows is just how important preparation is if you are thinking of buying a property at auction. At a traditional auction, where it takes place at the auction house, you need to ensure that you have an upper limit you'll be prepared to bid to. Any higher, and you should walk away. This is because, if you have a winning bid, as soon as the hammer goes down, you'll be legally obliged to see the transaction through to completion.

You'll be required to exchange contracts and pay a deposit, usually 10% of the hammer price, there and then, with 28 days to complete on the deal.

It can be an exciting proposition as a way of getting a potentially good deal on a property, but with the foreknowledge that you will likely have to spend money bringing the home up to a good standard, which requires an understanding of the post-auction budget to add to your financial planning.

Auctions are often the place to find dilapidated or poor condition houses that are frequently unmortgageable. This is usually because of their unusual construction or the materials used, the lack of functioning or cooking facilities, or significant damage caused by flooding, fire or other problems such as subsidence.

So, while on the face of it an auction property might appear to be a cheap way of buying a decent plot of land with a home on it, there is usually a lot of work required before it is either habitable or brought up to a decent standard. The exception is if the plan is to knock the building down and rebuild from new, with the assumption that planning permission has been sought.

Before you decide to chance your arm at auction, you should register with the auction house, usually with an administration fee attached, and obtain the legal pack. This is all the documentation prepared by the seller's conveyancing solicitor, covering the information that is usually sought post-offer in a standard property purchase, which is why the length of time from auction to completion can be slimmed down to just 28 days. At this point, too, you'll need to line up your own solicitor to work through the documentation, verify its completeness and highlight any potential issues that might prevent you from bidding on the property.

But you'll also need to get an experienced professional in to assess the condition and structural stability of the property. The building survey will highlight all the issues with the home, with pointers towards the work required and an idea of the cost of any remedial work, which you can factor into your budget planning. You'll also get an independent valuation, which will help you define what your upper bidding limit should be. And you'll get a section that details pointers for your conveyancing solicitor to look into as part of the preparation for the auction, for example, shared access or flying freeholds.

Armed with all this information, you'll be able to attend the auction, either in person or online, and make the right choices when it comes to bidding.

So, whatever your plans for moving home and buying your next property, make sure your budget includes the all-important survey. Surveyor Local will connect you to the best professional advice through our nationwide panel of chartered surveyors, all of whom are members of RICS. We only work with chartered surveyors who are RICS members, ensuring the survey you get is always professionally delivered, and they will work hard to identify all kinds of problems, including the impact of prior flooding on the structure of the property.

Call to get your no-obligation survey quote started, or to discuss your concerns about the property you're planning to buy at auction.

Or get a quick quote using Surveyor Local's easy-to-use quote generator. Simply enter your name, postcode, email address, phone number and an approximate property value, and we'll give you an instant quote by email.