Auction finance

Short-term, low interest auction finance

Properties bought at auction generally require a 5% deposit on the day while signing a legally binding contract to pay the remaining 95% within a 28-day period. This is where the bridging loan for auction comes in. Bridging loans are a preferred option as they help to bridge a gap until a long-term mortgage or sale can be secured. Bridging finance for auction is available for land, commercial and semi commercial buildings, residential and buy to let properties.

What can a bridging loan do?

  • The auction finance can be pre-agreed. You can have an agreement in principle from a bridging lender so that when the bid is won on auction day, you would quickly move it to the next stage.
  • A bridging loan is not always based on income or credit i.e. unlike a mortgage the lender do not require to see employment history or business plans depending on the exit route, which makes them that bit quicker.
  • The specialist lenders for bridging will consider certain properties bought at auction that high street lenders may not consider such as certain non-standard construction types. They will also consider properties that need refurbishing or ones that may not have fully functioning bathrooms or kitchen. This will allow you to purchase a property via a bridging loan, carry out the work and then either refinance or sell the property.
  • The bridging loan lender will also consider properties that will require heavy refurbishment or conversion.
  • These loans are available between 12-18 months.
  • You can usually borrow up to 70-75% loan to value of the property (i.e. size of the loan compared to the value of the property).

Prior to bidding on auction day:

  • Ensure that finance is available to you.
  • Review the full lot details for any conditions set out.
  • Properties purchased at auction sometimes need work doing to them so it is advisable to view the property with a builder, architect, surveyor to look over the work and costs involved.
  • Study the lot legal pack which will contain title deeds, local authority search and property information.
  • Carry out any legal search to see if there are any restrictive covenants, this may involve carrying further searches and if you don’t buy or win the property, the cost of which may be redundant.

Purchasing auction property using bridging finance

Many purchasers do not have the amount of cash available to buy a property outright. This brings Bridging Finance into the buying journey. Bridging Finance can either be arranged “in principle” prior to the auction or shortly after your bid has been successful. This would be well within the time frame required for completion and normally much quicker than mortgage finance which is due to the requirements of check credit and affordability etc which generally always takes longer to arrange.

Bridging finance can also be used when a property is deemed to be not suitable for a mortgage. This is normally when a property is without a kitchen, bathroom or both or has other defects where a bridging loan company will accept a client but a mortgage company will not.

Bridging Finance can be arranged on a new build property which has yet to be finished or on a renovation type project which for whatever reason has not come to fruition. Neither of these examples are generally allowable for mortgage finance but because bridging is simply based on the value of the security asset, provided the valuation is acceptable, then the bridging loan lender will usually lend up to their maximum LTV (Loan to Valuation) i.e. size of the loan compared with the value of the security and will do this quickly and without the fuss of a mortgage.

Land or commercial units are much easier and quickly financed by using a bridging loan rather than by any other finance type.

The bridging finance arranged at auction is a short-term solution and once the requirement for the bridging finance is resolved, then the bridging loan is either repaid by selling the property, by refinancing the property or paying off the bridging loan with available cash.

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Seller FAQs

Why auction?

Three reasons: Maximum price, speed and security.

Will I get full price for my property?

Yes. Selling at auction always means you will get the true value of any property. Yes the buyer is paying your fees but that does NOT mean you will get less for your property – you are simply saving a sales fee.

What properties are sold at auction?

Everything and anything. We have sold terraces, bungalows, unique properties, family detached houses, penthouse apartments, commercial units, businesses, new build properties and plots on behalf of builders.

Can I control the selling price?

Yes, you have complete control when setting the reserve price.

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Mini break terms & conditions

The winner of the competition will receive a TUI gift card to be redeemed in store or online, to the sum of £500 OR £500 toward the mini break of your choice.

The gift card will expire 30th September 2021

No Town & Country member of staff, their family or friends may enter.

You must have registered your details and then turn up at our next property Auction; 29th April 2019. The Holiday Inn, Povey Cross Road, Gatwick for a valid entry. (No obligation to buy)

This voucher comes with TUI’s terms and conditions, once redeemed, which can be found at https://www.thomascook.com/terms-and-conditions/booking-terms-and-conditions/

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How to achieve MAXimum sale price for your property/land

1) M – MANAGE
By setting an attractive Guide Price we encourage potential and active buyers to participate in the bidding process, while managing to stay in control of the reserve price.

2) A – ANTICIPATE
Connect UK Auctions allow bids from a number of sources which will help achieve the best price possible. These include bids from buyers ‘in the room,’ over the phone, by proxy AND Connect Realtime© internet bidders all live at the same time.

3) X – EXCELLENT MARKETING
High-profile marketing including: –

  • All major online portals including Rightmove and Zoopla
  • Our own unique and interactive website
  • Editorial solely for your property to local and national newspapers
  • Mailing your property / land details to THOUSANDS of active investors on our database
  • Creating virtual tour for majority of lots at the request of the property owners including drone footage
  • Marketing through our pro-active social media platforms including Facebook, LinkedIn, twitter and Instagram
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