Before you bid
Get auction finance agreed before you bid
Bidding without a line on finance is guessing. Auction houses want proof you can pay the deposit. Completion wants the balance. Neither waits for a high-street offer.
The useful sequence is: indicative terms or a decision in principle (DIP) on a price range and an exit, then bid only inside that box. After the hammer, the work is valuation, legal pack and drawing the facility — not starting from a blank application.
What “agreed before you bid” actually is
It is not a completed loan. It is a broker or lender saying, on the information you have given, that a short-term facility looks workable at a stated loan-to-value, rate band and term — subject to valuation, title and underwriting. In suitable cases that can mean up to 85% net on day one, or a facility that covers the purchase on a genuine below-market-value lot while remaining inside the lender’s maximum LTV against its accepted valuation. That is not a 100% LTV and it is not promised here. It is enough to stop you bidding past what cash and leverage will support. It is not a guarantee the funds will land.
If you want that conversation on a live lot, use Get indicative terms. Name, phone and email are enough to start; auction date and figures help.
What to have ready
- Auction house, date and a price ceiling you will not cross.
- How much cash you can put in — the auction deposit on the day, fees, and any gap the facility will not cover. In a strong BMV case that gap can be small; do not assume it. See how much cash you need.
- The exit: refinance, sale, or works then refinance. If it is BRR, model it first.
- A solicitor who will read the pack on an auction clock. See funding a 28-day completion.
Proof of funds in the room
Catalogues often ask for proof of funds or a deposit card before you bid. A DIP letter, a broker email, and evidence of the cash deposit are what that request is for. Turning up with only an intention to “sort a mortgage next week” is how lots get declined at registration — or won and then lost.
Questions
Is a DIP the same as a mortgage offer?
No. A decision in principle is an early view, subject to valuation and underwriting. A mortgage offer is a later document. Auction bridging is usually credit-approved against the asset and your exit, not a six-week high-street offer.
How close to the auction should I enquire?
Earlier is better. Packs, valuations and solicitor capacity all take days. If the sale is this week, say so on the form. We will tell you if the date is realistic. We do not quote a guaranteed turnaround here.
Can I get terms without a specific lot?
Yes — a price range, area and exit are enough to start. Once you have a lot number, send it. Terms tighten when there is an address.
If you already have a date, send it. Indicative terms belong before the bid, not after.