Buying a property pre-auction

Jimbo333_2

Hi all,

I'm considering a house which is "FOR SALE BY PUBLIC AUCTION (UNLESS PREVIOUSLY SOLD) Guide Price £60,000 - £70,000"

Now, it's a bit of a vague question, I appreciate that every seller is different, but what sort of offer do you usually need to make, to get the property pre-auction?

To my mind, if they estimate £60,000 - £70,000, then they're going to want an offer of AT LEAST £70k to call off the auction, maybe even £80k+? (which is too much for the property, and too much for me).

Anyone had any experience of this?

I can't really afford to buy at auction (how many surveys/valuations are you going to have to pay for before you end up bidding for a house and can actually afford to win it?) but can't stop being tantalised by the guide prices!

poppysarah

Ring them and make an offer. Are you going to have a survey done on it? Are you a cash buyer? To sell prior to auction they'll want it as quick as an auction sale.

princessamy86

Yes got experience from the other side, the company I work for runs auctions. A price to tempt a vendor before auction? It's very subjective! If they have had a lot of interest (say...10 viewings where people have fed back that they are interested in bidding), and maybe a few offers, most vendors will go to auction as they are more likely to get a higher price in the end.

If there hasn't been much interest, there'll be a lot of vendors who would bite your hand off for a decent offer. It's just like the open market in some senses, you get your unrealistic vendors and the ones who really need to sell. Most auction houses will insist you exchange contracts before the date of the auction, otherwise they will auction the property as planned. At a guide price of £60k to £70k I would expect the reserve price to be around £70k, some auction houses may put low guide prices on precisely so they tempt people in. You'll not be told the reserve price, but I think anything is worth offering on if you want it, after all they can only say no!

Jimbo333_2

Thanks for the replies.

No, not a cash buyer, but not selling anything either. I've got a healthy deposit, and I've made enquires about mortgages - no problems there. Survey is therefore needed, well- valuation at least.

I haven't seen the property yet, it's 90 miles away, but it's the area I'm targetting (I'm buying in my home town so I know the area). At £60k I'm in. At £65k, yeah ok. But £70k is too much (It's probably worth it, but I can't afford it, and I'm looking at low low risks in these troubled times).

Is a completely blind (low) offer, just too crazy an idea? There's only so many times I can be bothered to make a 180 mile round trip to see a place that (despite a guide price that suggests otherwise) isn't even in my budget.

Entertainer

Nothing's too crazy an offer. But bear in mind that guide prices are often set deliberately low simply to tempt in buyers (I know an auctioneer and he tells me exactly that). I went to an auction last year in London and the prices were all 30% over guide price. On the plus side, it sounds like it is in a cheap area so there may be less demand. Just don't waste too much of your time on this, auctions/ sealed bids have been one long wild goose chase in my experience.

olias

The OP is looking at spending £70000 and 'can't be bothered' to make a 180 mile round trip to view this house?:eek:

Olias

Jimbo333_2

olias wrote: »

The OP is looking at spending £70000 and 'can't be bothered' to make a 180 mile round trip to view this house?:eek:

Olias

That's a mis-quote.

I'm obviously not going to buy the house without seeing it, but equally, I'm not going to jump in my car and waste £30+ worth of fuel and half a day of invoiceable time, everytime a house pops up in my target area with a "Guide Price" that is acceptable to me.

As "Entertainer" says, these things can be a wild goose chase. I've been there before- you take the time to view a sealed bid flat with a guide price of £60k, to find it go for £80K+

Anyway- house is going to be viewed by a friend, and assuming it's not a pile of bricks in a carpark, low offer is probably going in;)

Jowo_2

And what is happening about a survey?

Jimbo333_2

HSV or building survey, not decided yet

Jowo_2

Howard Groome's book is very informative on the auction process, including how to handle pre-auction offers and post-auction unsold lots.

olias

Don't know where you are OP, but round here (NE), unless house is falling down, they usually go for at least 20% above 'guide'.

Olias