Valuation question for auction

johnboya1980

Hi everyone,
First want to say hello and great to see so many financially savvy people!

I've just had a valuation done on a flat I want to buy, which is up for auction. I originally put a pre-auction offer in which was accepted subject to exchanging before auction date. I know I won't make the deadline, hence now going to try and get it at auction.
Here's my question... If I win at auction but it goes for less or more than the mortgage offer, does a new valuation normally have to be carried out? I'm assuming it will be if it sells for more but surely not for less? Perhaps it's bank specific? Any tips on this would be great.

Additionally, if I won, I know the completion date is set in stone but is there any option to extend subject to agreement? The property is a repossession.

John

Typhoon2000

johnboya1980 wrote: »

Hi everyone,

If I win at auction but it goes for less or more than the mortgage offer, does a new valuation normally have to be carried out?

John

No.

johnboya1980 wrote: »

Additionally, if I won, I know the completion date is set in stone but is there any option to extend subject to agreement? The property is a repossession.

John

You could ask but probably not, as they hold all the cards (your 10%deposit).

GDB2222

You need to have a firm mortgage offer before you bid at auction, and you can only bid up to the amount that you can afford with that offer. Also, you need to have all your legals done before the auction. Plus a full survey if you want one.

If you have all that in place before you bid, why shouldn't you make the 28 day deadline to complete? If you miss the completion date, they'll serve a completion notice on you which gives you a few more days. Then they'll keep your deposit, re-auction the property, and if it sells for less than you bid you will be responsible for making up any shortfall over the 10% (after allowing for interest and expenses).

It would therefore be extremely unwise to bid at auction without having all the above in place.

johnboya1980

Hi,

Thanks everyone for their comments. I have the mortgage offer already in place but the legal work isn't quite finished yet and may not be by auction day. If most of it is done with the rest easily done by completion, should this be a problem?

GDB2222

Depends what it is - best to ask your solicitor. If you are prepared enough to be able to bid at auction, then you ought to be able to exchange an ordinary contract instead.

Doozergirl

GDB2222 wrote: »

Depends what it is - best to ask your solicitor. If you are prepared enough to be able to bid at auction, then you ought to be able to exchange an ordinary contract instead.

I agree! If you aren't ready to exchange immediately before the auction then you can't really be ready to exchange on the day either.

If the legals are not ready then presumably these will be necessary for your mortgage offer to hold. Your solicitor acts for your mortgage company as well as you - there will be conditions attached to that offer that the solicitor will have to satisfy through searches etc.

I think you need a chat with your solicitor about this and establish why you'd be ready to exchange at the auction but not before? You'd be taking a massive risk by exchanging without the legals being in place for completion - if anything isn't satisfied then the mortgage offer will go from under your feet and you will be liable for the 10% deposit plus costs.

Any extension in the time between exhange and completion would have to be negotiated before signing the contract and I fear the answer would be 'no' - the place is going to auction for a reason - because it is easy.

johnboya1980

Thank you everyone for your advice, I really appreciate it.