Auction property, first time buyer, tenants and mortgages

Name:_Lee

Hi, I am looking at buying a property at auction. I’m not in any great rush but hope to find something by the end of the year – lots of houses to look at, lots of auctions to attend… I have a few questions and hoped the community could help me answer them: Many of the auction properties I’m looking at are tenanted. I’ve been told by the auctioneer that if I want to see the property before the auction I need to get in touch with the tenants and politely ask them to grant me access/ show me around. How would you approach doing this? Many of the properties have 12 month assured shorthold agreements already in place. If I was to buy, I guess I would become the current tennants landlord until the agreement expired? Could I then remove the tenants and move in myself? Can you foresee any problems in doing this? Would I need to apply for a buy-to-let mortgage because of the assured shorthold tenancy agreement, despite the fact that I’m being forced to become a landlord/ let the house? My plan is to move in as soon as I can In acquiring a mortgage, would the bank need a house valuation? All I have before committing to buy is a guide price. How else could I go about identifying its worth? If I can get a mortgage agreement in principle together, how quickly do you think the banks will be able to release the funds to pay the auction house once I commit to buy? I have heard of extortionate fees if payment isn’t made within 30 days Do you see any pitfalls in the above? Any advice would be most appreciated. Regards, Lee

theartfullodger

Name:_Lee wrote: »

...............I’ve been told by the auctioneer that if I want to see the property before the auction I need to get in touch with the tenants and politely ask them to grant me access/ show me around. How would you approach doing this? Many of the properties have 12 month assured shorthold agreements already in place. If I was to buy, I guess I would become the current tennants landlord until the agreement expired?

Yup: But a tenancy does not expire until Tenant gives Notice2quit & goes or Landlord gets court possession order & bailiffs round. Realistically say 6 months from end of current AST fixed term...

Could I then remove the tenants and move in myself? ...........

Only through the courts the legal way. Anything else would probably be seen as harassment & result in Judge deciding you were a b****ard LL & giving Tenant more time..

Having bought (and the tenant does not have to let you, your surveyor, or anyone else in..) you'd first need to formally advise T of your name & address before you can start anything..

Cheers!

Artful

Richard_Webster

Just don't go there. You need to have a formal mortgage offer in place and all the legal stuff has to be checked before you bid.

PasturesNew

Top tip: take a big pot of Tippex and Tippex out those properties that have any mention of a tenant in them.

Only look for somewhere that you could live in.

To buy at auction, you'd need to have everything ready in place in case you bought it. e.g. mortgage applied for, survey undertaken, mortgage company knowing you'd be buying at auction, solicitor primed and already have read the full legal pack and confirm they can complete within the 14/28 days the legal pack says.

You'll have to have 10% (plus maybe some auction room fees) with you on the day as you have to hand that over when the hammer goes down.

There's no time/place for fannying about either, you have to complete on/before the time stated in the legal pack or you lose your deposit.

Doozergirl

I don't think you can even get a BTL mortgage without a residential mortgage already to your name?

It's risky enough buying at auction without buying somewhere tenanted. I'd avoid at all costs. You won't even know if they're paying the rent!

And I'd echo Richard; you need to be sure that the place is capable of having a mortgage raised against it at all. And that means spending all the money associated with solicitors and mortgage companies before you bid - fine if you get the house, not if you don't!