Mortgage for auction - help

byaru

Hi,
Could someone please advise on which companies to approach for mortgage as i am interested in buying property at auction.

Also, it seems pointless having a survey done on an auction property when you end up being out bid, could someone please advise at what point a survey should be carried out.

Many thanks.

Ems*Honie

Survey before you buy, what if it has subsidence? Or dry rot? Or any number of things! I advise asking a broker to look into mortgages, Martin mentions a few in the mortgage section of the site

Jorgan_2

You really need to get a survey done before the auction. Buying without a survey is a big gamble, many, altjough not all, properties go to auction because they have structual defects. Its better to loose £500 on a survey when you have been unsuccesful in bidding on a property than £15,000 deposit money when you find the property isn't mortgagable & you have to withdraw from the purchase.

You may also want to employ the services of a solicitor to check any legal packs that are available to you.

Please do some research into buying a property at auction, before you actually go and buy. Go to some auctions, see how they work.

david29dpo

depends on the house you intend to buy, i bought at auction last week with no survey. the flat was only 2 years old though!!

byaru

Thank you. Since you recently bought at auction, i hope you dont mind if i get some advice. How much research did you do about the house? What factors did you put into consideration to set your price limit? How about builders etc. I will appreciate any info as i am very new to the auction but would like to give it a go.

byaru

Ems, thanks. I shall have a look at Martin's mortgage section.

Jorgan, thank you too. Very useful advice. Any tips on how to go about bidding? I have read that there are all sorts of people in the auction house such as developers, parents who want to buy properties for their children etc. What happens if i am outbid everytime i go to auction, is auction buying not for me? (sorry this question may sound silly but any advice & tips appreciated). Is it also true that Mortgage lenders are not keen to lend on Freehold properties?

Thanks

Jorgan_2

Many people think that buying at auction involves some sort of secret knowledge or process, it doesn't. Also if you sneeze or scratch an itch, you haven't just put in an offer.

Many auction houses require you to register before they will accept bids from you.

Have a plan, such as: set youself a price limit & stick to it. Don't bid to early, wait until the auctioneer is calling 'going once' before bidding. Some people like to stand at the back of the room so they can observe the 'competion', some like to sit right at the front, they can make discreet bids without making it obvious to those behind that they are bidding while others are just pleased to have a seat.

Be warned, if you do go & register at an auction, don't try & help the auctioneer out with an opening bid. A client of mine was telling me that her sister went to auction, years ago before the boom, with a view to seeing how things worked & registered her details, she thought it was just a registration process for everybody attending, not just for those buying. A lot came along & the auctioneer was struggling to get any bids on run down house in the Welsh Valleys, this lady decided to help the auctioneer out with an opening bid, the only bid as it turned out and the proeprty had no reserve. Fortunatley they took credit cards, the house was sold for £10k.

I would have loved to be a fly on the wall when her husband, later at home, asked what she had done with her day.

byaru

Jorgan, thanks again. I shall bear in mind all the information provided. Are you by any chance in the property business or have you bid at auction before? (Sorry for the direct questioning but you seem to know what you are talking about in depth - no offence to any one and i respect all other forum members).

The house market these days seems to be becoming more difficult (except for those who can readily afford). I am doing some research so i can try the auction and see if i can land myself a house for myself however, i thought i should do the research first and probably get ideas and views of those who have experience or have been to auctions before.

In your opinion, do you think the house market is any better now? Also, what in your opinion should be the determinant factor in setting a price limit? Should one base it on their surveyor's report?

Many thanks again for your time to share all the useful information.

Jorgan_2

byaru wrote:

In your opinion, do you think the house market is any better now? Also, what in your opinion should be the determinant factor in setting a price limit? Should one base it on their surveyor's report?

Many thanks again for your time to share all the useful information.

Better than what & when? I can only really answer for the area I work in, I am an Estate Agent, house prices have generally been static for 18 months or so. Some people who bought new builds at a premium 2 years ago are loosing money if they are trying to sell.

The surveyors report would certainly be helpful in determining a price limit. It would give you the low down on what work, if any,was needed and a guide price as to what the surveyor thinks it is worth in its current state. The surveyors price & the figure you set out to try & purchase at don't have to be the same. Ideally your target price should be below the surveyors price.

Know your market, do research into what else has sold in the area and the price that was achieved, not asked. Also try & factor in the cost of any works that need doing. Sellers always tell me that a buyer can always purchase a new bathroom for the property for around £250. True, but if they pay someone to fit it, then re-tile the bathroom, buy tiles etc. the true cost of a bathroom is around £1000 or four times what the seller thought.

byaru

Thanks for the info.
What area are you in? ( if you dont mind the question). I am in London and looking for a 3 bed house (Zones 2, 3 or 4) for my family but i have found prices very high at the moment. I can only afford £170,000. I am still doing alot of research before i plunge into the deep thus keen to try the auction as well . . . not sure this is the right route (auction) but who knows. Any other suggestions?

Very invaluable advice, thank you.

maryjane01

Hi, I went to the Allsop auction in London this week and tried to buy my first house unsuccessfully. I think a lot of the London properties went for over the odds and of the other few couples that stood out as being first time buyers trying to get on the ladder most went home disapointed like myself from what I saw. I think there were probably a few good buys for other parts of the country, but from looking at house prices in London over the past 12 months it just keeps going up. I think because of programmes like Property Ladder a lot of people are considering turning to auctions (In London anyway) and it is ending up like some things on ebay that sell for over the odds because people don't do their research and think they are getting a bargain because they bought at auction. Do some research on a particular area then go and sit in on one. My feeling is there is no way to get a discounted property in london, you have to choose a smaller place than you want further away or in a bad area. Living in London is all about compromises.