Auction properties can be tempting, but they often come with hidden risks. Here’s why buying at auction might not be as great as it seems and why a bridge loan could be a smarter alternative.

1. Limited Time for Due Diligence

Auctions leave you little time for thorough research. Without proper inspections and legal checks, you could end up with a property full of hidden issues, leading to unexpected costs.

2. Immediate Payment Pressure

Winning an auction means paying around a 10% deposit immediately, with the full amount due within 28 days. This tight deadline can cause financial strain, especially if securing a mortgage on time is difficult.

3. Hidden Costs

Auction properties are sold “as-is,” often leading to expensive repairs or legal fees. What seems like a bargain can quickly become a costly mistake.

4. Competitive Bidding

The excitement of auctions can drive prices above market value, negating any potential savings.

5. Financing Challenges

Securing traditional financing for auction properties can be tough, especially if the property needs significant repairs.

Why a Bridge Loan is a Better Option

A bridge loan offers quick access to funds, flexibility, and less pressure, making it a smarter alternative to auctions. It allows you to secure a property without the risks of auctions, giving you time for proper inspections and financing arrangements.

“While auction properties may seem attractive, they come with significant risks. A bridge loan provides a safer, more flexible alternative, helping you make smarter property decisions without the financial pitfalls of auctions. Contact us today to find out what your options are.”

Annabelle Bezant, August 2024