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Understanding auction finance

Buying a property at auction requires a clear understanding of how finance works and how quickly funds need to be in place. Unlike private treaty sales, auction purchases are legally binding on the day, with fixed timescales for paying the deposit and completing the transaction.

There are several ways to finance an auction property, including cash, bridging finance, specialist auction finance and, in some cases, mortgages. The right option depends on the property type, your circumstances and how quickly the funds can be released.

Knowing your finance options in advance of the auction allows you to approach bidding fully prepared. You’ll have confidence that you can meet the required deadlines and complete the purchase on time.

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Why finance planning matters at auction

At auction, preparation is everything. Once the hammer falls, you are committed to the purchase and must proceed in line with the legal pack and completion timetable.

Preparing your finances before bidding helps you:

  • Bid with confidence on auction day
  • Understand your total budget, including deposits, fees and costs
  • Meet strict completion deadlines without delays
  • Choose the right finance solution for the property type
  • Avoid the risk of losing your deposit or incurring penalties 
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Finance options available

There are several funding routes commonly used for auction purchases. The right option will depend on your individual circumstances, the type of property you are buying, and the timescales involved.

Common options may include:

  • Short-term finance solutions, such as bridging finance
  • Specialist lending for non-standard or unmortgageable properties
  • Cash purchases for faster, simpler completion
  • Buy-to-let or commercial mortgages, where timescales allow
  • Refinancing options following completion, if required 
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Supporting you through the process

First for Auctions works alongside experienced finance professionals who understand the demands of auction purchases. They can guide you through your options, explain what’s achievable within auction timescales, and help you prepare well before auction day.

They can help you:

  • Assess your borrowing options
  • Understand affordability and lending criteria
  • Identify suitable finance solutions for auction properties
  • Work to tight timescales and completion deadlines
  • Move forward with clarity and confidence 
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When should I arrange auction finance?

Arrange your auction finances before auction day. Because bidding results in a legally binding contract, buyers need certainty that funds can be released within the required completion timeframe.

Ideally, you should explore your finance options as soon as you find a property to bid on. This allows time to assess the property, review the legal pack, and confirm that your chosen lender can meet auction deadlines.

By having finance agreed in principle ahead of time, you can bid with confidence, avoid delays after the hammer falls, and reduce the risk of penalties or losing your deposit due to funding issues. 

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Money-saving auction mortgages

Trusted and professional, our sister company Mortgage Scout has advisors that specialise in money-saving mortgages for auction purchases.

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A very happy seller (2 bed freehold house). We used First For Auctions as the property was not suitable for an estate agents due to needing to be renovated. They are part of the same group as Leaders, (the Romans Group) who asked them to get in contact with me. I found them to be very knowledgeable, affable and they kept us updated on the process every step of the way. Gareth Bell was my point of contact, and he was very good at explaining everything in a transparent way, so that I was kept completely up to date with the weekly email updates and explanations of the markets reaction to the house, and he was always available by phone for any question, no matter how small. I thought we may get less for the house at auction, especially as the reserve was set under what we hoped for, but in reality, the house went for slightly more than its value, and the completion was hassle free in only 6 weeks! As an unconditional auction, it gives the seller total peace of mind, as there can be no last minute buyer shenanigans. I would absolutely use them again, both to sell, and to buy.
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Niaomi
21 days ago

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