Help! - How to buy a house at auction?

Wings

quote "I would urge you to try one as a disinterested party first. Even if you miss this particular property, there'll be another one along another time. What I learned mostly that day was that, while there are, as folk say, bargains to be grabbed - it would be very easy to get it wrong.

just my 2p..."

Very good advice, those that are full time professional property speculators tend to keep a database of their local area property prices, attending all auctions and listing the prices achieved. So that at any auction they will know what they are prepared to pay for any certain property, and what if successful with that bid what they can possibly make from the resale of the same. Ten years ago I purchased many properties from auctions, now as with most things the general public are too well informed, so there are now very few bargains to be had, with high prices now being achieved, therefore being no different to those being displayed in EAs "shop" windows.

If one is looking for a bargain from an auction, one must be like the property speculator, first do your research, not put all your hopes into any one property, set a maximum price on a property, and keep to it. Lastly, whilst do attend your local auctions, the best bargains may be found at national auctions for the odd one or two properties local to your area, where local people might not be willing to put in the effort of attending the same.

quote ".....Where do you look for Auctions? I have not seen any advertised near me or in EA's?"

Try these sites;

http://www.savills.co.uk/

http://www.allsop.co.uk/

http://www.landlordzone.co.uk/dir/auctions-sales.htm

http://www.ukauctionlist.com/

Tiger_greeneyes

This is the auctioneer I've used - they're based in Norwich - which has a huge growth rate in property prices at the moment, incidentally http://www.tops-property.co.uk/auctionhouse/auctions_new1.asp

samspam

I've just read this thread with much interest as I am considering buying a commercial property at auction, so a HUGE THANKS to everyone who contributed, it's been really helpful.

Wig

Lara wrote: »

interesting thread and something I have been wanting to do. Too much TV obivously! Where do you look for Auctions? I have not seen any advertised near me or in EA's?

Being an avid MSE

I found this site
http://www.auctionpropertyforsale.co.uk/free_property_search.htm
good for telling you about properties in your area, coming to auction, if you click on the property you are told the date of the auction...but no picture. so you have partial address details.

This website is the 2nd one I use (enter the name of the town of the property you found from 1st site. You get a picture of the property - but no date - but it does tell you the Lot No. (useful for google sometimes)
http://www.eigroup.co.uk/public/futurepropertyauctions.asp

Now you can look (using google) for property auctions booked for the date specified and try using the property address & lot no. from the 2nd site. And then you can go to the website for that auctioneer and download the online catalogue. The method doesn't always work, but it has for me, as I now know most of the auctioneers in my area.

I found the worst one for getting information about lots is "countrywide" - I think the same company who is behind the "rightmove" EA website. They have no Auction website listing lots, and require you to order a catalogue from a premium rate phoneline.

A 3rd website to use is rightmove (probably come up in your google results), if it is a countrywide auction lot it will sometimes be listed on rightmove and it will say "to be auctioned by countrywide property auctions on 30th April" etc

The Barnard Marcus website, has an online cat, but if you want the real thing posted, they say phone the premium number.......but if you look a bit closer on the website it also says or complete this online form and one will be sent....I did, and it was sent in a couple of days, no need to waste money on the phone!

Lara

Excellent post Wig - a lot of information. Thank you very much. Shall see I shall spend quite a lot of time looking today .

catt_2

Thanks to all for their very helpful advice!

Here is our update which we hope makes for interesting reading.....

Well, instead of going away for the Easter weekend we changed our plans and went to the viewing instead! So we have now been to the open viewing and seen the house inside.

It is much as I had imagined it and certainly did not disappoint. It does need some work though.... There is no double glazing but we think we could live with that. More importantly, there is no central heating, no power shower (a must for OH!) and old-style electrics, so it will need rewiring and more power points. It could do with a replacement kitchen and bathroom over the longer term.

We spoke to the EA present but did not get much info about the house, except that he said we should have a survey and that a surprisingly large number of people buy without one. The EA also suggested we are welcome to view again at the second and final viewing opportunity. We noticed from his list as we signed in that only 5 people had viewed. There is one more viewing date this week. We think that is very few potential bidders. What do you think? Was the Easter weekend a factor?

We came away and did our sums, as we both like the house.

Now for our tactics on how to proceed. Here are the facts. We have no experience of bidding at property auctions. I have viewed auction properties before and attended once at an auction to observe. I have often bid at antique furniture auctions but that is hardly the same as there is so much more money at stake! Also, I wouldn't want to get carried along with the bidding momentum. So we are not at all keen on bidding at action. We would prefer to offer beforehand.

Failing a successful offer, I think I would leave it. This is because there are a number of other houses for sale locally that might suit us and most of these vendors would consider an offer. As we have sold our house we are in a strong buying position. We have cash for the deposit and we are not part of a conveyancing chain.

Another concern is the guide price of the auctioneer is higher than when the house was briefly advertised with EA locally. Whilst speaking to the EA at the viewing we just quoted the lower price repeatedly and so did he, refering to it as the guide price and not correcting us to the higher price. Do they actually expect it to sell for less?

By way of background information, last year we viewed another house locally which had been stuck on the market at £390,000 and the EA told us we could try an offer around the £360,000 level but we were not interested. Imagine my surprise when on browsing through recent past sales of another national auctioneer I found it had sold at auction for £455,00, having been placed with a guide price of £430,000. That purchaser has a house that is not worth as much on the open market locally as they paid for it. The lesson is that properties sometimes go for a lot more at auction. And who were they bidding against? Maybe bids "off the wall" with the auctioneer just bidding up to the reserve or even the owner bidding?

Anyway, we are still awaiting the legal pack from the auctioneer. I was minded to phone them today with our offer but my OH said we should allow ourselves more time to consider the level at which to pitch our offer and to see the legal pack first. Also, to allow the local EA sufficient time to contact the national auctioneer with feedback on the number of viewings. If this is unduly low our offer may be considered more favourably.

We do not yet have a firm price in mind but it will be well below the guide price. We know the local prices very well, having done all our Land Registry past sales prices research, knowing what all the local EAs have on their books in our price range, etc.

I am tremendously excited but trying to stay very level-headed.:cool:

catt_2

Latest update!

Surprisingly, OH, who is very cool about all this, has just got in touch. Has put in at work for a day off on 19 April and says I should do the same!:T

lobright

This is all facinating stuff! I too am looking at a property with my girlfriend thats going to auction on the 19th of April... hope it's not the same one!!

One thing that not been mentioned is insurance of the property. If we were to 'win' the property at auction, then we are legally responsible for it. Dioes anyone know how to go about arranging insurance for it?

Thanks in advance!

Lob

Ems*Honie

We considered a gorgeous house that went to auction whilst we were house hunting. (only problem with it was all the garden was out front, on a fairly busy road) WE spoke to our broker, who was happy to go ahead, however he said it was best to survey and get a firm mortgage offer prior to the auction. If you can't mortgage it in time for any reason after the hammer has fallen you will forfeit your deposit. (and it could be something silly on the survey, this house had an outhouse that had slipped a little, instant 'subsidence' and uninsurable, it took a good while to sort it all out)

OH opted to not risk it in the short time frame, but promised me if it sold within our budget he would make it up to me. It did sell in our budget, and typing this has reminded me that he owes me

Good luck,, looking forward to updates

catt_2

All very interesting....

Lobright,
If it's 19 April I'm guessing yours is in the same Barnard Marcus auction. With 198 lots listed it's unlikely to be the same house! To further reduce the odds against it being the same one, ours only had 5 people viewing.

As for buildings insurance, a purchaser takes on the risk and hence should insure from exchange of contracts which at auction happens when the hammer falls.

Ems,
Our problem is that our intended lender probably can't get the valuer to visit the property in time for the auction. We are still working on resolving this issue somehow.

We'll keep you posted!