In a previous video we were talking about property auctions and I was highlighting the fact that it’s entirely possible to spend a lot of money getting yourself ready to bid at the auction and not actually even getting the chance to bid.
But perhaps what a lot of beginners don’t realise is that there’s also some hidden fees which you may have to pay at the auction which could completely distort the deal that you think you’re doing on the property.
For example, many auctioneers will charge a buyer’s fee. Now it varies from auctioneer to auctioneer so you need to check the small print to see how much they’re going to charge but it could be something like £1000 which they’re going to charge you for being the successful bidder as part of their fees, so they’re charging the vendor a fee and they’re going to charge the buyer a fee.
Now that could distort your figures, you need to know that.
You also need to go through all the small print in the auction as well because there’ll be the conditions of sale, the special conditions of sale, but there’ll usually be special conditions attached to a particular property and there may be particular charges which you have to pay for that particular property. For example it’s not uncommon for a vendor to perhaps charge within these special conditions the buyer the cost of undertaking searches on the property.
Because when the property’s put up for market with the auctioneer the auctioneer will want a legal pack which contains all the searches, all the relevant documentation, for example, and it’ll be there available for you to download so that you can see whether the property is suitable for you.
What you might not know though until you’re told is that the seller can actually recharge the cost of preparing the legal pack, for example, back to the buyer.
So there’s all sorts of charges which you may find which you’re paying which if you didn’t look you wouldn’t know and so you think you’ve bought the property at a price and it turns out you’re not going to be paying that price at all. Especially when you get into things like VAT on commercial properties and all sorts of things, weird and wonderful stuff which can happen in property. So do make sure that you check this out.
Another reason why, by the way, I think that buying at auction for your first property as a beginner probably isn’t the best way to go, I’m not saying don’t because it might be the deal of a lifetime but I’d be very cautious about it.
I hope you found that informative and inspirational and if you want help in property please do come over to my website thepropertyteacher.co.uk. Loads of great resources there including my blog. There’s loads of free videos, loads of great articles, there’s free reports to download including Learning With Peter where you’ll be able to access resources like my video courses, like my ebooks including my home study course The Successful Property Investor’s Strategy Workshop which I’ve literally sold thousands of copies of which takes you through how I started in property literally with none of my own money but how I was able to build a portfolio of £2 million worth of the property in just four years. I’ll show you everything that I did right so that you can do the same and I’ll show you everything that I did wrong, I tell you about all of my mistakes so that you can avoid them so that you can progress in property far more quickly than me.
Until next time, here’s to successful property investing.
Peter
Peter Jones
(ex) Chartered Surveyor, author and property investor
https://thepropertyteacher.co.uk
PS. By the way, I’ve rewritten and updated my best-selling e-book, The Successful Property Investor’s Strategy Workshop, which is an account of how I put together my multi-property portfolio, starting from scratch and with no money of my own, and how you can do the same.
For more details please go to:
https://thepropertyteacher.co.uk/the-successful-property-investors-strategy-workshop