Buying a house at auction....or just before?

clareybear99

Hello there, just wanted to know if anyone has ever experienced buying a house at auction? My husband is in the armed forces and will be leaving soon and once he has left he will get a payout of around £50,000. We never wanted to go down the mortagae path which is why we never got on the property ladder but since we were 18 we have only known military housing and renting. I can honestly say i have absolutely no idea when it comes to owning a home, we have three children so we are looking at getting a decent ish three bedroomed family home..... so any answers you could give to the following questions would be much appreciated

How likely is the auction starting price going to reflect what the property is worth?

Will solicitors need to be involved?

How long would it take before we could move in if we won an auction?

Are there any hidden costs that could make the process difficult?

Is it possible to make an offer on a property before it gets to auction and any extra cost?

Thankyou in advance for any constructive advice )

clareybear99

anyone?....

jackomdj

Sorry but how long is a piece of string?

If two people want the property it can fly, if it is only you and you keep quiet initially they may drop the price.

If they think they will sell well at auction they won't accept your offer.

Also you should really get a survey done before the auction which is obviously wasted cost if you don't get the property. But if you don't do one, get the property and find issues then tough!

Good luck with whatever you decide to do.

Bigmoney2

guide prices can be set low to get interest so it could go for much more
Auction properties often (but not always) need a lot of work, so need to factor in the cost
Usually need to cpmplete within 28days of auction so need finances in place but sometimes it can be as little at 14 days, so need to read the legal pack.
Will need 10% deposit on the day as well as ID , this should be detailed on the auctioneers website/catalogue.
If you can go to a couple of auctions to see how it works this would be useful.

Wobblydeb

clareybear99 wrote: »

How likely is the auction starting price going to reflect what the property is worth?

Will solicitors need to be involved?

How long would it take before we could move in if we won an auction?

Are there any hidden costs that could make the process difficult?

Is it possible to make an offer on a property before it gets to auction and any extra cost?

Thankyou in advance for any constructive advice )

It's a few years since I bought at auction, but here's my 2 pennies:

- Auction starting price is often low, and can be lower than the reserve leading to properties remaining unsold despite offers above guide price.

- After auction you progress with the sale as normal, so would use solicitors who liaise with the seller's solicitor.

- The auction I used had a 28 day completion period, so certainly used to move faster than normal sales. I didn't manage to make the 4 weeks, but because everything was going well we agreed an extension and completed in 5 weeks. It will help you to have solicitor, mortgage and valuation lined up. Be aware that if you don't meet the deadline you can lose the deposit paid when you attended the auction.

- I didn't come across any hidden costs. Read the brochure carefully as regards deposit and completion requirements. The auction I bought at has 2 different sections. The first has a £2k deposit requirement, the second has a 10% deposit requirement - to be paid on the evening of the auction.

- Yes, you can make an offer on a property before the auction, and the owner can withdraw it from the auction. Not sure whether they would seek any additional assurance from you before agreeing to do so.

- SET YOUR LIMIT AND STICK TO IT.

- If you can view the property before bidding, take the most experienced mate you can around with you - preferably a surveyor! There are a lot of problem properties go through auction, so you've got to be aware of what might be wrong with it, and adjust your bid accordingly. I bought a flat in a housing association block, so didn't have structural issues to worry about. I am not sure I would have had the confidence to buy a victorian house I also had my eye on.

DVardysShadow

Before you buy at auction, you need to know the basic house buying process more or less inside out. And then appreciate the significant differences of buying at auction. There are some issues for the unwary. Not having a mortgage allows you to buy a house at auction which might be in the auction because it is ... er ... unmortgageable. This is actually not a problem until you want to sell, when suddenly you find all your wealth hangs on someone else buying at auction.

Seriously, as an FTB I advise you to buy with a small mortgage and pay it off sharpish. Having a mortggae ensures that the purchase is to the satisfaction of a lender with a lot of experience and ensures that the purchase process is done properly.

eddddy

Wobblydeb wrote: »

- Yes, you can make an offer on a property before the auction, and the owner can withdraw it from the auction. Not sure whether they would seek any additional assurance from you before agreeing to do so.

The standard terms are that if your offer is accepted, you exchange contracts immediately - with a 28 day completion date. So you have to have done your legal checks (and got a mortgage, if required), before making the offer.

Obviously, the vendor will only accept an offer if he/she thinks you are paying over the odds (i.e. you are paying more than it would go for in the auction room.)

Trollfever

Spambump.....

property.advert

You need to think of the bigger picture to alleviate what could be unmanageable pressure. You are trying to save money but so is everyone else.

I'd factor in the cost of 3 surveys as you may have a survey on a property which you do not get. You cannot chase after a rising price just because you have spent money on a survey.

Don't rush into things. Go to an auction in an area which is nowhere you want to be so that you are not tempted to get a flavour of things.

Look at the running order. If I go to an auction with my eye on 3 properties and I secure one early, then I am not there to bid on an item late in the afternoon as I already have my purchase. Conversely, if I have been priced out of the early auctions, I may be desperate to buy something and thus force the price up. Yet I still favour properties later in the day.

Make sure you have options, such as a sale next month or in a week or two. It takes the pressure off.

If you are thinking about major building works, then speak to the council planning people and note if there are any restrictive covenants etc. attached to the property.

Get some basic figures down on paper first. Cost of installing windows, heating, new roof, landscaping, kitchen, flooring, decorating etc. are all largely figures which you can have worked out beforehand and only require factorial adjustment for smaller or larger properties.

Be realistic about the work you can do yourself. For instance, I priced a kitchen the other week down at £650 or so which is where I saved money but I would not usually dream of fitting it myself as I earn more money than kitchen fitters. If I didn't then I would be better off doing it myself.

Get familiar with plumbing and electrics. It is not rocket science.