Buying property at auction can be one of the most exciting and rewarding ways to invest, but it comes with a critical constraint: you typically have just 28 days to complete the purchase after the hammer falls. This is where auction finance becomes essential.
The 28-Day Challenge
When you win a property at auction, you exchange contracts immediately and are legally bound to complete within the timeframe specified — usually 28 days. Traditional mortgage lenders rarely work within this timeframe, which is why specialist auction finance exists.
How Auction Finance Works
Auction finance is a form of bridging loan specifically designed for auction purchases. Key features include:
- Speed: Decisions can be made within hours, with funds available in days
- Flexibility: Can fund residential, commercial, and mixed-use properties
- High LTV: Up to 75% loan-to-value on most properties
- Short term: Typically 3-12 months, giving you time to arrange long-term finance or sell
Preparing Before the Auction
The smartest auction buyers arrange their finance before bidding. This involves:
- Get an agreement in principle from a specialist lender
- Instruct a solicitor who is experienced in auction purchases
- Arrange a valuation or at least research comparable sales
- Set your maximum bid based on the finance available to you
- Read the legal pack thoroughly before auction day
After the Hammer Falls
Once you have won the lot, the clock starts ticking. Your lender will need to complete their due diligence, instruct a valuation, and issue the loan — all within 28 days. Working with an experienced auction finance lender who understands these time pressures is critical.
At StatusKWO, we specialise in fast auction finance with dedicated teams who work to your deadline. Contact us before your next auction to get prepared.