There it is.

A Peterborough property with a price that makes you look twice.

You click through the photographs.

Needs decorating.

Kitchen has seen better days.

Garden appears to have declared independence.

But at that price?

Your brain has already started calculating the profit.

Stop calculating for a moment.

At auction, the number that gets you through the door isn't necessarily the number that tells you what the property will cost.

And once you've successfully bid at a traditional unconditional auction, changing your mind can be considerably harder than closing the browser tab.

The legal pack comes before the excitement

If you're buying at auction, find the legal pack.

Then actually read it.

Better still, have a conveyancer check it before you bid.

Depending on the property, it can contain title information, searches, leases, tenancy details, planning documents and special conditions applying specifically to that sale.

And those special conditions deserve attention.

They can contain costs that sit on top of your winning bid.

Imagine celebrating because you've bought below your maximum, only to discover that another charge was sitting several pages into the paperwork.

That's not the sort of auction surprise anybody wants.

Find out exactly what you're buying

The photographs tell you what the estate agent wants you to see.

The paperwork tells you rather more.

Does the title match the land you think you're buying?

Is there shared access?

A right of way?

Restrictions affecting what you can do with the property?

A tenant?

If somebody is living there, don't simply assume they'll be gone when you collect the keys.

Establish their legal position and exactly what the auction terms say about possession.

Then there's the physical building.

Auction doesn't make roof problems, damp, drainage trouble or structural movement disappear.

If anything, the compressed timetable makes knowing about them beforehand even more important.

Don't win the property and then start looking for the money

This is probably not the ideal time for:

“Right, who does mortgages?”

Before bidding, know how you're going to fund the purchase.

Some auction properties may not qualify for an ordinary residential mortgage because of their condition, construction, occupancy or legal position.

You'll normally also need a deposit very quickly.

A 10% deposit is common at traditional auctions, although the individual auction conditions are what matter.

Then check the completion deadline.

Auction purchases can move much faster than an ordinary house sale.

If your lender needs longer than the contract gives you, you've got a problem even though you were perfectly capable of affording the property eventually.

Eventually isn't the deadline.

The guide price isn't the reserve

These two numbers are easily confused.

The guide price gives buyers an indication of the price range around which the property is being marketed.

The reserve price is the minimum figure the seller has agreed to accept.

So a property appearing with a particularly attractive guide price doesn't mean that's necessarily where the hammer will fall.

Decide your maximum before bidding starts.

Not while somebody else is bidding.

Not after you've increased by another £2,000 because you're “nearly there”.

Before.

Auctions are very good at turning:

“I won't go above £180,000.”

into:

“Well, £188,000 is basically £180,000.”

It isn't.

Add up the price nobody puts in the headline

Before deciding your maximum bid, look for:

• buyer's premium
• administration charges
• VAT where applicable
• legal costs you're required to pay
• search costs
• other charges or payments in the special conditions
• survey costs
• finance costs
• Stamp Duty Land Tax where applicable
• the repairs waiting for you after completion
•  

Only then do you know what your £180,000 purchase really costs.

Peterborough lots can appear through regional auction houses including Auction House East Anglia, which has a Peterborough office.

Its own information makes clear that individual lots can carry additional fees and payments.

That's exactly why the individual paperwork matters more than assumptions about “how auctions normally work”.

Selling at auction? You have homework too

Auction can appeal to sellers because it creates a fixed sale date and can move more quickly than a conventional listing.

But don't simply choose an auctioneer and wait for bidding day.

Check the commission.

Marketing charges.

Withdrawal terms.

Reserve arrangements.

Who pays for preparing the legal pack.

And what happens if the property doesn't sell.

If the property has a tenant, unusual access, planning issues, lease complications or anything else a buyer's legal adviser is likely to discover, get it dealt with properly in the paperwork.

Surprises are much more entertaining on birthdays than during conveyancing.

The boring hour before the auction could be the most profitable one

Auction can be a perfectly good way to buy or sell property.

It can be fast.

It can expose properties to motivated buyers.

And occasionally a buyer really does find an opportunity that makes everybody else wonder why they missed it.

But the bargain isn't the guide price.

The bargain is what remains after you've understood the building, paperwork, finance, deadline and every extra cost.

So by all means get excited when you find an interesting Peterborough auction property.

Just get excited after your calculator and conveyancer have had their turn.

Property Speak — Translated

Legal pack — The collection of legal documents provided for an auction property. It can include title information, searches, leases and special conditions of sale.

Unconditional auction — An auction where a successful bid normally creates a legally binding contract immediately.

Guide price — An indication of the price around which the property is being marketed. It isn't necessarily the price the seller will accept.

Reserve price — The minimum price the seller has agreed to accept at auction.

Overage clause — A condition that can require a buyer to make an additional payment to the previous owner if a specified event later increases the property's value.

Have you bought or sold a Peterborough property at auction?

What surprised you most the bidding, the fees, the paperwork, the deadline or the property itself?

Tell us in the comments.