Property auction warning issued

Tuesday, 15 January 2008 12:00 AM

As many as 75 per cent of bidders at property auctions have failed to secure a valuation on their potential home, new research has found.

The findings are contained in research from Auction Finance, which argues reckless bidders are playing "Russian roulette" with their finances.

While practised investors can rely on their skill in the property market, this is not an appropriate course of action for beginners, according to the organisation,

"Seasoned developers with a lot of experience in property and large portfolios often don't bother getting a survey. Many of these buyers use their existing knowledge about property to approximate its value and spot any potential problems," said Irene Thomas, operations manager at Auction Finance.

"However, auction novices should not follow their example and we would always recommend getting a survey carried out before buying."

While this may result in an additional financial burden, the benefits significantly outweigh the expenditure.

"It may cost more but the amount of money, time and hassle it could save in the future by highlighting any major flaws is worth the added expense," continued Ms Thomas.

"Buyers must be aware if they make a successful bid they are committed to going ahead with the sale."

According to the Royal Institution of Chartered Surveyors (Rics) around £5.2 billion worth of property is sold at auction each year.

Over 25,000 homes go under the hammer each year, with increases in both numbers and value expected in the near future.

"Buying a property is usually the biggest purchase we make in our lives so it is well worth spending that bit extra for peace of mind. Cutting corners in the property game is generally a false economy," concluded Ms Thomas.

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