Get survey for EVERY property at auction?

JohnDoe1

I am thinking of buying at auction and have read that you should get a survey for the property you are interested in. The question is if you are interested in a few properties would you really get a survey for each one?

That could get really expensive!

Say I was interested in 4 properties then the surveys would cost ~ £400 * 4 = £1600. Then say that I got outbid for all of them and had to go to another auction and did the same thing and that would cost another £1600 and so on ....

To do that is not very feasible is it?

JQ.

Them's the risks, and that's why many people who buy at auction are builders / property experts themselves - they can spot the good one's themselves without the need to pay somebody else.

Why not pay a good friendly builder £200 to spend the morning with you visiting the 4 properties. Don't ask for a report, just get him to give comments on the buildings as you walk round. They are as likely to spot defects as a surveyor and will be able to give rough on the spot costings.

Radiantsoul

Presumably it is better than paying tens of thousands more than a house is worth though.

MacMickster

If you don't know what work needs doing on a property how will you decide what your maximum bid will be?

JohnDoe1

JQ. wrote: »

Them's the risks, and that's why many people who buy at auction are builders / property experts themselves - they can spot the good one's themselves without the need to pay somebody else.

Why not pay a good friendly builder £200 to spend the morning with you visiting the 4 properties. Don't ask for a report, just get him to give comments on the buildings as you walk round. They are as likely to spot defects as a surveyor and will be able to give rough on the spot costings.

Thanks. That's a pretty good idea! Only 2 problems with that is a) finding a friendly builder and b) he might decide to bid on the property after seeing it!

Radiantsoul wrote: »

Presumably it is better than paying tens of thousands more than a house is worth though.

Obviously, but if you went to bid for 10 properties and did a survey for all 10 and didn't win, you'll be £4k+ down already which may be the amount you pay for the repairs on the actual property you win.

MacMickster wrote: »

If you don't know what work needs doing on a property how will you decide what your maximum bid will be?

Well, on viewing the property you would inspect it for any visible cracks and structural damage. Apart from that, all you can go on is it needs a new bathroom/kitchen/floors/windows etc and work out your max bid from that.

So the only thing you don't know, for sure, is the structure (which, I know, could be the most expensive repair!)

Jeffrey_Shaw

Another viewpoint: V [vendor] of a property with no defects would be much more likely to sell it if the Auction Pack were to include a recently-prepared Homebuyers Report. The contract would make P [purchaser] liable for reimbursing V in respect of its cost, true, but P ought to bid much more enthusiastically in such a case!

RobertoMoir

JohnDoe1 wrote: »

I am thinking of buying at auction and have read that you should get a survey for the property you are interested in. The question is if you are interested in a few properties would you really get a survey for each one?

That could get really expensive!

Say I was interested in 4 properties then the surveys would cost ~ £400 * 4 = £1600. Then say that I got outbid for all of them and had to go to another auction and did the same thing and that would cost another £1600 and so on ....

To do that is not very feasible is it?

I'd say it was infinitely preferable or feasible or whatever when compared to the cost of buying one of the properties and finding out it needs £20k of work done on it to make it safe.

If you can't take on this risk, either by being able to do some kind of survey yourself, or absorb the costs of getting one done, then an auction may not be for you.

Like a lot of things, like a survey on a normal purchase for that matter, you're gambling the cost of having it done against the potential much larger cost of not having it done.

G_M

If you don't want to pay out for a survey for each property you are interested in then the alternative is to bid, and possibly buy, one or more properties without a survey, and then deal with the problems/costs once you are the owner.........

Everyone knows auction buying is more risky, uncertain, hurried etc and that's why most owner-occupiers use the 'traditional' route. Typically auctions are used by developers, builders, property professionals (or amateurs trying to become professional).

Recent TV series have encouraged Joe Public to try their hand in the hopes of getting a bargain, but the risks/costs remain.

sonastin

You need to balance the costs and the risks:

Get surveys done: chance of incurring (low) survey cost = 100%, chance of incurring budgeted work cost = determined by the survey, chance of incurring unexpected (high) work costs = heading towards 0%

Don't get surveys done: chance of incurring survey cost = 0%, chance of incurring budgeted work cost = depends on how skilled you are at assessing what needs doing, chance of incurring unexpected costs = depends on how much you missed when assessing what needs doing.

If you have confidence in your ability (or that of a friendly builder), you can afford to sacrifice the guaranteed survey cost. If you don't know what you are looking at/for, how are you going to quantify the cost and the associated risks?

Thrugelmir

JohnDoe1 wrote: »

To do that is not very feasible is it?

And the alternative is the loss of the 10% deposit paid when winning the auction. As subsequently you are unable to mortgage the property.

Good reason why auctions attract cash buyers and prices reflect this. Risk.

Jeffrey_Shaw

Thrugelmir wrote: »

And the alternative is the loss of the 10% deposit paid when winning the auction. As subsequently you are unable to mortgage the property.

Good reason why auctions attract cash buyers and prices reflect this. Risk.

Hence what I said in post #6.