Buying a house through sealed bids ?

Jules77_2

Hi,

A house is about to come on the market in the next village which we are really interested in buying.
It is in a bad way and needs a lot spending on it but it's location is lovely.

It is going to sealed bids with a guide price of £120,000 which is what the estate agent has valued it at, it is going for sealed bids as the owners of the house died and it is in the best interests of the nephew ( who inherits ) to get the most for it.

Now the house next door which has been improved is currently on the market for £225,000 , quite a difference ! They are semi detached.

So, we really want this house but unsure on the whole sealed bid system, do we offer the asking price or slightly more ?

Any advice welcome,
Thanks.

Davesnave

You offer what you think it's worth to you, bearing in mind the likely cost of renovations. You shouldn't try to second guess what anyone else might offer.

Often, the guide price isn't what the agent thinks it's likely to go for, but something a bit lower to encourage interest. The same applies to auctions. It is just that, a guide.

I bought my first house by sealed bid in similar circumstances to the one you describe. I remembered to offer an odd sum of money, just in case someone bid the same. i.e. £9 252, not
£9 250. (Yes, it was a very long time ago!!!:rotfl:)

Jules77_2

Thanks for the reply ,

I know I can only offer what I can afford, but I was wondering in this current market, would people try and bid lower do you think ?

ScotlandM

Any idea how much interest there has been? Perhaps asking the neighbours to the property if there have been many people going to the house.

Yes, some people will be bidding lower but with any sort of interest there will be some people paying a bit more.

No one here will tell you go in low and take blame for you not getting it. If next door went for 225 after 50k work then it would be silly to think this will sell for 125. Only you can decide how much the work will cost and if the 225 next door is an actual reasonable price. If you think the property you want is worth 134,000 have that as your maximum bid. You don't get a second chance to increase your offer!

Davesnave

Jules77 wrote: »

Thanks for the reply ,

I know I can only offer what I can afford, but I was wondering in this current market, would people try and bid lower do you think ?

In some parts of the country, such as Wales, some properties at auction are going for sums below the guide price.

However, unless this is in a cheap area with a very stagnant market, it's unlikely that a cottage in a "lovely" location would be ignored by those most able to buy and renovate. Chief among these might be builders looking for a winter doer-upper, to fill those days when they have no other work.

PS. Do remember that, regardless of what they say on "Homes Under The Hammer," renovation is often more difficult & expensive than demolish & new build!

Jules77_2

Thanks,

It's not on the market yet, going on on Thursday, we have inside information as my neighbour is executor of the will !

And we can only bid so much as its not our money, my mother in law will cash buy it for us and once we've sold our house , we will remortgage and pay her back.

I'm wondering how much next door will influence it and that it will go for more than we can afford

Chinkle

What's the history behind the sale? Did it go on the market get lots of offers and then decide to go to sealed bids. It's important to get a feel for how many others are interested. And if you are sure of your figures then I would think £120K is a knock-down price just to whet people's appetite. You will only get one shot at it, so if you really want it go in at the top price you are willing to pay. Trust you have the money set aside for the works, and also check it is mortgageable in its current state, if you need one.

Jules77_2

Davesnave wrote: »

In some parts of the country, such as Wales, some properties at auction are going for sums below the guide price.

However, unless this is in a cheap area with a very stagnant market, it's unlikely that a cottage in a "lovely" location would be ignored by those most able to buy and renovate. Chief among these might be builders looking for a winter doer-upper, to fill those days when they have no other work.

Yes, that's the thing, if this was not run down it would be out of our price range, it's a funny area to sell houses, it's a remote village in a desirable area but my mother in law for example has had her house on the market for over a year with very little interest, albeit a different price tag, around £500,000 and this is the average price for this area.

northerner77

Davesnave wrote: »

In some parts of the country, such as Wales, some properties at auction are going for sums below the guide price.

Which parts of Wales, where are the auctions held? Thanks.

Davesnave

northerner77 wrote: »

Which parts of Wales, where are the auctions held? Thanks.

All parts, I'd imagine, but the South Wales valleys are traditionally cheap.

I don't know much about them, but further west this company have regular auctions in three locations. You can sign-up to get the full details of properties.

http://www.johnfrancis.co.uk/auction-next.htm

While some parts of Wales are cheap, relative to England, people should remember there are socio-economic reasons for this.