'Don't rush' buying property abroad

Auctions are becoming an increasingly popular method of buying property as a result of the economic downturn. Under-pressure homeowners are turning to sales rooms to help them offload their units quickly and the potential to make massive savings on purchases is attracting shrewd buyers looking for a bargain. Prices have been falling in many major destinations, but auctions can still offer the cheapest deals in a lot of places, which is drawing investors in.

Because of this high level of popularity, the buying from auctions trend has moved to the internet, where a number of companies are looking to put properties under the hammer for the first time. While this can lead to even greater savings and convenience for investors, however, a number of experts have warned this week that people need to be careful when bidding via this method.

Ben Marson told the Times: "There's a danger buyers will be enticed into rushing their purchase, without using a lawyer. They may also be told a property is reduced by up to 50 per cent, but that may be based on a valuation taken two years ago."

Another authority on housing investment Ingrid Rix was quoted by the news provider as saying some properties being auctioned either have major legal issues or are poor quality.

"Some of the best prices are in developments currently classed as illegal," she remarked, referring specifically to Spain. She added "The local authority moved recently towards legalising them - so they could be great buys - but it might still be years before the situation is settled."

Such legal issues have led to some property portals pulling out of online auctions altogether. Stuart Law of Assetz said that difficulties in monitoring the regulations involved in internet sales forced his firm to withdraw from the segment. The US was a particularly difficult country to manage, he commented, with many properties that appeared to be bargains weighed down by "hidden liabilities".

Still, away from online auctions, there are some suggestions that now could be a good time to buy in the US, where prices have plummeted along with the rest of the world in recent months. In June, Gerson Lehman Group suggested in a report that foreign property buyers are indicating signs of confidence that the housing market in Florida - one of the country's biggest investment destinations - is going to recover.