Low prices and falling rents have created a situation where banks are feeling the pressure to get large loans off their books and have resorted to putting a significant number of commercial properties up for auction hoping for a quick sale.
This is good news for investors who are searching for a bargain, according to property experts at Midlands law firm George Green.
Banks have been pressured to offer assistance to customers who are in arrears on residential mortgage or rental payments, but the same level of flexibility has not been extended to commercial customers who have fallen on hard times.
In the latter case, the liquidation of a business or selling of its assets to pay creditors is often required at the first sign of financial difficulties. As a result, more pub premises and industrial units have been coming onto the market recently.
Investors who are looking to snap up properties at auction can make purchases quickly and easily, but they are also advised to proceed with caution, particularly if they are inexperienced in the auction process.
Buyers are required to pay 10 per cent of the purchase price on the day of the sale, and the balance is due within 28 days.
The new owner is usually liable for any damage to the building from the moment the hammer falls and should ensure that adequate insurance is put in place right away.
Prospective buyers should perform their due diligence on the property before placing a bid by reviewing the information pack before the day of the sale. Viewing the property in advance or having a professional do so is also advisable before deciding whether or not to bid on a particular commercial property at auction.
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