Property bought at auction

siy1083_2

Hi Friends,

This is my first post, but im after a little help/advice on what is the best proposals to complete on my property purchase.

Here is the details:

1) I saw a property that i was previously interested in 3 years ago, i did all the usual checks etc, and then managed to contact the owner, The purchase price requested was £300k
I thought it was too expensive, for my budget atleast.

2) The other week i drove past the property to find that it was going to auction with a unrealistic low guide, did an online check, to find it was in the auction the next day.

3) Went to the auction, which was fairly busy, and couldnt resist, rose my hand a couple of times, and bought he property for a silly low price, paid the deposit ect and signed the contracts.

4) Spoke to my lender who we have used previously who offered to lend 65% of the OMV (open market value), but then said as it was auction property the purchase price is the new OMV as that is the least it would return.

My propblem is this, i am now £17,000 short, firstly, since the auction i have had a lot of interest in the property, form developers etc, i dont want to develop it into a group of houses, i want to turn it into a nice family home, so they wont lend me money unless i develop it on a joint venture.

I have had it independantly valued at £150,000 90 day and £170,000 OMV, as you can see, lots of propfit if i wanted to flip it, but dont have the time. The valuer was a local agent who said it didnt make its true potential as it was not marketed correctly nor was it in the right auction. But hey there you go.

I dont want to loose this investment as it has alot of potential, also the rental income deriveable would be silly.

Any advice would be much appreciated. thanks

theartfullodger

So you bought something at auction (must pay within 28 days or big probs..) without having the lending on-that-deal lined up??

If so, sorry, but I fear you're in deep doo-doo.. time to talk to any, any, lender who will loan enuf at any rates ...

Hope it works out and hope itt really was worth the price you paid..

kizkiz

Get a loan for 17k.
At least if everything fails you can sort a deal with the developers

ruggedtoast

You actually have to buy it now, at the very least you'll lose your deposit. Does that not concern you at all?

MacMickster

ruggedtoast wrote: »

You actually have to buy it now, at the very least you'll lose your deposit. Does that not concern you at all?

Take note of "AT THE VERY LEAST". You are legally committed to buying the property. If you can't borrow this £17,000 elsewhere then you may have to consider a firesale of your assets (eg car).

siy1083_2

thanks for replies so far,

i know i must complete, and i know by hook or crook the money has to be paid, i was just wondering if any other users knew of any good lenders etc, or have any constructive advice, i knew i could get the majority of the lending needed, and worked on a worse case scenario, loosing my deposit does concern me but im sure this will not be the case, just wanted to know where i stand.

devotee

Where you stand is that you have to buy it. So arrange further loan for 17k, do the property up or whatever you need to do, then remortgage or sell and pay off the loan. As you said, it's a long term gain with a short term struggle.

ruggedtoast

siy1083 wrote: »

thanks for replies so far,

i know i must complete, and i know by hook or crook the money has to be paid, i was just wondering if any other users knew of any good lenders etc, or have any constructive advice, i knew i could get the majority of the lending needed, and worked on a worse case scenario, loosing my deposit does concern me but im sure this will not be the case, just wanted to know where i stand.

Currently you're standing under a £17,000 shortfall and a legal obligation to buy a house you apparently cant finance without borrowing.

On top of that the clock is ticking as you have at most one month from the date of purchase to complete.

That means all your conveyancing and mortgage has to be put through in 4 weeks. A process which can take months from start to finish.

You need to be on the phone sorting a mortgage out now, right away, not !!!!ing about on web forums!

kingstreet

I'd say the most important thing is to get the legal pack to your solicitor so he can find out how much damage you've done. At this point, there's no way of knowing if the property is mortgageable. There might be any number of problems lurking in the detail.

There's no point looking for a lender until you know the property is ok.

siy1083_2

kingstreet wrote: »

I'd say the most important thing is to get the legal pack to your solicitor so he can find out how much damage you've done. At this point, there's no way of knowing if the property is mortgageable. There might be any number of problems lurking in the detail.

There's no point looking for a lender until you know the property is ok.

Legal pack was sent to solicitor asap, they have read through and done checks, its all ok, no problems, surveyor has gone round and again no problems,

Please, im no ****ing around on forums, and i did ask for CONSTRUCTIVE advice, its not like im dumb enough not to do any research at all, or just play at an auction

ruggedtoast

You need to sort your shizzle out my man.