Auctioning a house

MMF

Hi Money Savers,

I'm hoping someone out there knows a thing or two about selling a house by auction and can give me some tips, like...
*what are the pitfalls to look out for?
*what happens if reserve isn't met?
*how the process actually works?!!

My Situation:
We've got a house in South Wales near Cardiff which we need to sell quickly.
We've chosen the auction route because the house is ideal for a developer - there are some aspects which don't meet building regs (the main reason for not using an estate agent).
We're not in a position to develop the property ourselves.

*Are we doing the right thing by considering auction rather than agents?

Basically...
Any advice or comments on our situation would be much appreciated. I couldn't find anything on the site about selling by Auction.

Oh, and finally... if anyone could recommend a good auction house for the Cardiff region (if that's allowed?) it would be appreciated.

Many thanks for taking the time to read this - hope you can help me.

Thanks

bridiej

Other (please let me know)

Second time lucky with posting this....

I've no experience of selling by auction but I believe that selling by auction usually results in getting less for the property than selling via an agent in the normal way.

Sorry this isnt much help...


By the way, I voted other as personally when we sell we're going to do it ourselves, but not sure how quick this would be.

frugal_dougal_3

MMF wrote:

We've got a house in South Wales near Cardiff which we need to sell quickly.
We've chosen the auction route because the house is ideal for a developer - there are some aspects which don't meet building regs (the main reason for not using an estate agent).

Your reasons are a bit odd.
Most auctions only take place every couple of months or so, and if you wait for the next one you won't necessarily sell anyway.

Why doesn't your house meet building regs ? Is it because of something you have done yourself ?

When the gavel falls at an auction the bidder is under a legal obligation to buy and has to put down a 10% deposit there and then. Therefore he/she will be aware of the house's problems if they have any sense.

You will still have to pay a fee for selling in this way.

Developers go to auctions to pick up bargains. If you don't get your reserve price the house will be taken out of the bidding and you will be back to square one.

m00nie

I recently looked at putting a property in our local auction.

they valued the property at 100k on open market and 75/80k at auction.

there was also an upfront fee to pay of approx £500.

As Frugal said, if the buyer must pay a 10% deposit and completion must be withing 28days.

bridiej

Other (please let me know)

Good point about the building regs - I think buyers usually get a survey done before the auction day so anything like that will show up and no doubt hit the price...

MMF

Thanks for the replies so far

For clarification:

The building regs issues are easily remedied for a builder/developer but would probably prevent a mortgage so we'd need cash buyers.

I know Auctions usually have a lower return, but because of the building regs issues we figured there would be more cash buyers. Traditional routes (estate agents) tend to be mortgage buyers and since a mortgage probably wouldn't be granted in current state that's why we chose auction.

I'm after any advice about property auctions, and opinions on if we've made the right decision financially.

Hope that clears it up a bit.

Thanks again.

Debt_Free_Chick

The building regs issues are easily remedied for a builder/developer but would probably prevent a mortgage so we'd need cash buyers.

But it depends on how much the buyer wants to borrow. If they need a 100% mortgage, then yes, this issue might prevent a mortgage.

But if they have a deposit, then it may not prevent them getting a mortgage. The higher the deposit, the greater the chance this will not affect them.

Also .. what would the target market be? if FTB, then they are likely to have lower deposits. If not FTB, then you stand a chance that they have a good deposit, from the sale of a previous property.

And developers tend to have large deposits or cash.

I would not write off the Estate Agents route. Have you spoken to several in your area to see what they think? Often, they have developers ready & waiting.

Good luck

MMF

Thanx debt-free-chick (love the name btw!), that's really given me food for thought.
It sounds so obvious now you've mentioned it, but we've never sold a house before so hadn't thought of that!!
We'll have a good talk to the local estate agents then, and see what they have to say for themselves.
Thanks again

John_M_Business

Hi there

I think that it would be dangerous to go to auction as most auctioned properties do not achieve close to their actual value and are often auctioned off as a distress sale.

Better for you to apply for retrospective planning consent (right now) on what isn't under building regs or just point them out to the prospective buyer and swallow the pill.

There are still buyers out there who will take the risk - and not just in auctions.

frugal_dougal_3

Further to my previous reply.

I agree with the above comment. If it is at all possible to put the Building Regs matter right it would probably be worth your while financially to do it, albeit that this is going to slow things down.

Yes developers do have ready cash, but they didn't get it by paying over the odds for properties with problems !

MMF

Thanks for all the replies so far, you've all been really helpful.

Couple of things...

What is retrospective planning permission? and...
Will we have to put it right to get it?

Also, I totally understand about developers only having cash because they've not paid over the odds for houses with problems. I would like to add that we're very realistic about this and our expectations reflect the current condition. We're selling because of circumstance and we'll be more than happy to just break even.

It is my partners house. He bought it to live in with a now ex. Her father ran a local S.Wales builder's yard so she got the lads round and they did what the bosses daughter told them!! Like knock a supporting wall down! :eek: It now has an RSJ in place, put in as a favour by the same lads, but we suspect it doesn't meet regs and would need to be a bigger one. This was done un-be-known to my partner (the owner!). Also, I'm pretty sure the planning office knew nothing about it.

We're not developers and we now live in England, up North well away from the property, so we don't want to get invovled with builders when we can't be around to manage the project. It's a resource drain so we need to sell so we can concentrate on our house in England.

Please don't leave feedback about any comeback on her or the builders yard for their actions - that's a very closed chapter in history now, and being 'in the family' was all 'off the books' anyway. Thanks.

We're realistic about the regs issues and aren't in a position to 'make good' ourselves, we just want rid of it, as is.

Hence our call for auction v estate agent advise. You've been really helpful with that one and given us plenty to consider.

If I've understood, we should try several estate agents, being up front about planning regs issues.

But , if anyone understands the wonderful world of planning regulations then a bit if advice about selling a house with the probs outlined above would be gratefully received.

Many thanks.