Buying at Auction

Ewarwoowar2

Hey everyone,

I've seen a property near where I currently rent. It's in an auction with a guide price of £60k. It also for sale on an estate agents website for £115k. There's two other properties in the same development available for rent at £800 per month. The two bed flat was originally sold for £195k in 2006.

I've got enough cash to buy up to £65k. However, I'd prefer to buy using half cash and half mortgage (as I've only got £70k in savings).

If I bought the flat I'd probably live in it for a year or two before buying a house. I'd then either rent the flat out or sell (depending on the market).

I know auctions are not for the faint hearted. However, do you think it's worth making an offer to the solicitors dealing with the repossession before the auction? If so, how much do you think I should offer?

In addition, what's the likelihood of getting a very small mortgage within the 28 day period the finances must be sorted out after the auction?

Also, as a first time buyer, do you think I'm a bit mental buying a flat at auction?

GDB2222

I don't think you are mental.

Generally, this is not a good time to be buying, as prices are still falling. If you sell in a year or two, you are likely to make a loss.

Before buying at auction, you ought to get your mortgage sorted out before bidding. Otherwise, you'll have to limit your bidding to whatever you can pay for with cash, as it's too risky to assume that you can arrange a mortgage after you are already committed to buying. That means paying lost of fees up-front, before you even turn up at the auction.

You are probably aware that sometimes the guide prices are a bit of a come-on, so you may have no chance at all of buying at anywhere close to £60k.

Quite a lot of properties do get sold prior to auction, so contact the agents. However, it is unlikely that the vendors will take it out of the auction unless you exchange contracts before then. That may put you under even more pressure than buying at auction.

stevetodd

GDB2222 wrote: »

IYou are probably aware that sometimes the guide prices are a bit of a come-on, so you may have no chance at all of buying at anywhere close to £60k.

Yeah I agree I think the guide prices are a joke, if you did manage to get it for the guide price it would be worrying as to why, I would be thinking damn what did I miss