As a property investor, you are certainly well aware that buying a property at auction can be a great way to secure investment property at an attractive price on a much shorter timeline than other properties on the market. Sometimes, properties that are auctioned remain unsold for a variety of reasons. These properties, which didn’t receive any bids during the auction, can often be acquired at attractive prices. In this article, we’ll explore what unsold auction properties are, what happens to them, how to find them after closed auctions and how to purchase them online. So, if you’re a savvy investor looking for potential deals, read on!
What is an Unsold Auction Property?
An unsold auction property refers to a property that didn’t receive any bids or meet the reserve price during a live auction. This could be due to various reasons, such as unrealistic pricing, lack of interest or market conditions. These properties are usually put up for auction by banks, lending institutions or government agencies and represent opportunities for investors to acquire real estate assets at potentially discounted prices. Often, after a property fails to sell at auction, the auctioneer will liaise with interested parties and ask them to put forward their best offer so they can negotiate with the seller.
What Happens to Unsold Auction Properties?
When a property remains unsold at auction, it doesn’t mean it’s off the market and that the opportunity to buy it has gone.
Typically, the property reverts to the ownership of the party that organised the auction. They might choose to relist the property for another auction or consider alternative methods of sale, such as listing it with an estate agent or offering it through online platforms. As an investor, this provides an exciting opportunity to negotiate a deal directly with the owner outside the auction setting.
An unsold property will usually remain on the auction house’s website with a sale price stated. From here, any interested parties can request more information or arrange a viewing of the property. Some sellers may choose to lower the reserve price to attract more interest or reenter an auction at a later date.
For investors, buying an unsold auction property allows more time to conduct research before making an offer rather than a more snap decision during a live auction.
How to Find Unsold Property After Closed Auction?
There are several strategies that investors can adopt to find unsold auction properties:
- Attend Auction Previews. Before the auction, many organisers offer preview periods where you can inspect the properties coming up for auction. Attend these previews to familiarise yourself with the properties and identify potential opportunities. Make a note of any properties that catch your interest but remain unsold after the auction closes.
- Contact Auction Organisers. Reach out to the auction organisers, whether it’s a bank, lending institution or government agency, to inquire about the status of unsold properties. They may provide you with information on whether the property is still available for sale and the process of how to express your interest.
- Browse unsold lots on an auction house’s website. Auction houses often have links to unsold properties on their websites where you can browse real estate still available after the auction. Some auction houses in the UK that have these sections include SDL Auctions, Clive Emson and Auction House.
- Work with Estate Agents. Estate agents often have access to information about unsold properties that are back on the market. By establishing relationships with agents specialising in distressed properties or foreclosures, you can tap into their network and receive notifications when unsold properties become available.
How to Buy Unsold Auction Property Online
Nowadays, there are many online auction houses. Below, we cover a few ways that you can buy unsold auction properties online:
- Research Online Auction Platforms. Many auction platforms have emerged that facilitate the sale of unsold properties online. Research and identify reputable platforms that offer a wide range of properties in your desired locations. Ensure the platform provides detailed property information, including photographs, reports and legal or financial considerations.
- Set up Email Alerts. Once you’ve identified reliable online auction platforms, set up email alerts for specific property types or locations. This will notify you when new properties matching your criteria are listed for auction, including unsold properties that have been relisted.
- Due Diligence. When you find a property that interests you, conduct thorough due diligence. Review property reports, title deeds and any other relevant documentation. If possible, visit the property in person or engage a local inspector to assess its condition.
- Establish a Bidding Strategy. Determine your offer for an unsold auction property based on your financial capabilities and the property’s market value. Remember to factor in any potential costs of repairs or renovations needed. Remember, the property didn’t reach the desired price at auction for a reason. It could have been priced too high or it was because of a different reason. However, properties are often auctioned off because a quick sale is needed, so you may be able to negotiate a price below the original auction reserve.
- Engage Legal and Financial Experts. As with any real estate transaction, it’s vital to consult with legal and financial professionals to ensure a smooth and secure purchase. They can help you navigate the legal intricacies, review contracts and provide valuable advice.
Buying unsold auction properties can be an excellent strategy for investors seeking quality real estate opportunities. By understanding the nature of unsold properties, actively searching for them after closed auctions and leveraging online platforms, investors can uncover hidden gems and potentially secure properties at favourable prices. Remember, thorough research, due diligence and professional guidance are essential when venturing into unsold auction property buying. You can turn these unsold properties into profitable investments with the right approach.
Are you wondering if you can take out a mortgage on a property purchased at auction? Find out more here in our previous article.