Buying a property during the Covid-19 pandemic
If you are thinking about buying a property during the Covid-19 pandemic, check out our blog for our latest advice.
Buying a property is a big financial commitment and for many of us, it will be the largest and most expensive asset we will ever own. Buying at auction is usually a fun and exciting way to buy and with an immediate exchange of contracts and fixed completion date, you know the property is yours on the fall of the gavel without the risk of being gazumped or the chain falling through.
However, the Covid-19 pandemic is affecting all our lives and raising a lot of questions on whether people should still be considering buying a property during this time.
Peoples first concern should be their health and wellbeing and that of their family, friends, colleagues and everyone around them. But with so much uncertainty we wanted to answer some of your concerns and questions about what it could mean for your next property purchase.
Should I buy a property during the Covid-19 pandemic?
The Government’s advice is to only move if it is critical to do so. What defines critical is somewhat subjective, and it can also depend on certain factor like – if you are already in a chain, have already exchanged contracts and cannot delay the completion date and if the property is occupied or vacant. But whatever the situation we should all be staying at home as much as possible and only going outside for food, health or work reasons (if we cannot work from home).
That is not to say you cannot buy a vacant property and wait until restrictions are eased before moving in, but this will depend on your personal circumstances.
• Have you already viewed the property?
• Can you have a survey?
• Can you carry out all your usual checks?
• Do you have your finances in place?
If the answer to any of the above are no, then our advice would have to be not to exchange contracts on any property until restrictions are eased and you are in a better position to proceed.
Viewing a property
With the country in lockdown and restrictions on social distancing, it is currently impossible to view a property even if it is vacant. You should not leave your home to inspect a property even from the outside as this is not considered essential travel and you do not know who you might come into contact with.
No property professional should advise you to buy a property without viewing it and carrying out your full due diligence and property checks. This would be very risky, and we fully recommend against legally committing to buy a property and exchanging contacts if you have not had the chance to view it.
If you are buying on the open market, this is less risky as it usually takes 6-8 weeks (or even longer at this time) before exchange of contacts and you could make a provisional offer subject to viewing as soon as the restrictions are eased.
Arranging a survey & other property checks
If you are having a mortgage or raising finance, it is often essential that a surveyor inspects the property on behalf of the lender.
A number of surveyors aren’t working due to the current restrictions and the Government’s advice not to carry out non-urgent surveys. The same applies to builders or other contractors who you might want to inspect the property to satisfy yourself as to any essential works before legally committing to the purchase.
We would recommend that you always have a survey on any property before legally exchanging contracts.
Read the legal pack
All auction lots will need to have a legal pack before they can be offered, and it is essential that you read it before bidding at auction and exchanging contracts. These should still be available to download free of charge from the auctioneer’s website.
The legal packs include all the terms of your purchase and any costs that may be payable in addition to the purchase price. You should also read the common auction conditions and important information/notices and ask a Solicitor to read them on your behalf if you are not sure what you are looking for.
Remote Bidding Auctions
At the beginning of April, we made the difficult decision to cancel our May auction. We are the Number 1 Auctioneer in Midlands, and as the market leader we felt that we had an obligation to prioritize the health and safety of our clients, staff and the wider public over our commercial objectives. Our record-breaking and award-winning team are passionate about selling property and especially about property auctions, and we were devastated to have to make such a decision. We have between 2,000-3,000 people attend each of our auctions so for obvious reasons our traditional in-room auction could not go ahead.
We could have turned to what we call remote bidding auctions, where the auction is still held on a set time and date, with a number of properties being offered on the same day. Potential purchasers register before the auction which allows them to place a proxy bid (the auctioneer bids on their behalf up to their maximum amount), by phone (they bid over the phone via a member of our team) or on the internet (via a secure area on our website). We already offer these services at our in-room auctions, so they are all tried and trusted ways of bidding, in fact we had 850 remote bidders register for our 27th February 2020 auction, so we know it works. However, the reason why we decided not to proceed down this route at this time, as some other auctioneers have done, goes back to the fact that potential purchasers can’t view and with difficulties of getting a surveyor out to a property they can’t carry out their usual pre-auction checks and may find it difficult to raise finance.
As lockdown is eased, hopefully over the coming month or so, this is likely to be the first stage of getting our auctions back up and running. Our team are eager to get going again so as soon as we can commence viewings, we will be ready to hold our next auction.
Keep up to date
We already have over 130 lots confirmed for our next auction – and we could get close to beating our own record! Please keep an eye on the properties page of our website or click here to sign up for our auction updates to be the first to hear about our auction dates, properties and results.
Honest & impartial advice
We hope you have found this useful. We pride ourselves on always offering our honest and impartial advice so if you have any further questions or want to know more about buying at auction our staff are still working, albeit remotely from home, and can be contacted in the usual way by phone 0121 312 1212 or email [email protected].
Please do not hesitate to contact us and we will be happy to answer any of your questions or click here for our auction buyers guide.