Buying at auction

UserWG47

Hi, I would be grateful to hear from anyone who knows about buying at auction. I have no experience of auctions, but a property near me has been ropossessed and is up for auction by the recievers at the end of this month.

Its a bit complicated which I hope will put others off. For a start it has been burnt out. It needs demolishing and lots of work.

It is also only leashold over 900 years remaining. I have bought the legal pack and registered for the auction.

There is no point getting a survey done, I know its all unstable and needs demolishing, but its the land I am interested in.

I have been reading through but dont understand all the legal jargon.

I know its worth paying for legal advice but do not know where to go for it? Can I ask a soliciter for him to read throguh the legal pack and tell me if there are any major things I should know? For example what if there was a right of passage through it or something?

I know buying at auction is dangerous, you need to know everything before bidding.

Also about the lease. Its over 900years, and £35 per year. I read its about £190,000 to buy out the lease. Well are these numbers inflation proof? Or will they go up?

For example, if I die, will my great gran children still be paying £35 per year? And could their grandchildren then buy out the lease for £190K which would probably be min wage by then?

Sorry for long post with many questions. I do not know where to turn to start with, I know I will have to pay for some legal advice, but wanted to ask here first.

hazyjo

Firstly, can you let us know if you need a mortgage or if it's a cash purchase?! If mortgage, it's probably a no-go anyway.

Jx

gazter

You will need planning permission to build on a piece of land, even if a previous property existed and had to be demolished.
Keep that in mind.

UserWG47

Cash purchase as long as its not too high above the guide price.

I can go a little higher borrowing funds from parents, but I have a limit in my mind so I have enough left for what I want to do with it.

UserWG47

gazter wrote: »

You will need planning permission to build on a piece of land, even if a previous property existed and had to be demolished.
Keep that in mind.

I know thanks. I will cross that bridge when I come to it.

I would post a link to the property but its so hot I dont want competition at the auction.

Same problem asking for legal advice, I dont want them to think wow thats a good buy!

Its not that amazing or anything unless you like the area, I mean nothing happening around here, just peacful for retirees like myself. No jobs or anything, so I hope not much competition.

Its just the guide price is amazing I suppose to tempt buyers in. It could go for way more than the guide price, but I will go along to the auction for the experince and the small chance that it will sell for not too much over the guide price which would be within my reach.

UserWG47

Can anyone answer this question about inflation and long leases?
Also about the lease. Its over 900years, and £35 per year. I read its about £190,000 to buy out the lease. Well are these numbers inflation proof? Or will they go up?

For example, if I die, will my great gran children still be paying £35 per year? And could their grandchildren then buy out the lease for £190K which would probably be min wage by then?

I mean it kind of makes leases over hundreds of years worthless?

UserWG47

I have bought the legal pack and registered for the auction.

There is no point getting a survey done, I know its all unstable and needs demolishing, but its the land I am interested in.

I have been reading through but dont understand all the legal jargon.

I know its worth paying for legal advice but do not know where to go for it? Can I ask a soliciter for him to read throguh the legal pack and tell me if there are any major things I should know? For example what if there was a right of passage through it or something? I know everyone says do due diligence, but how to do it? I dont mind paying for legal advice but as I said I dont want them to think wow thats cheap and they want to go for it?

I know buying at auction is dangerous, you need to know everything before bidding. But this is so cheap and near to my property I am really happy just for the land. Even if I never get permission to build the house back.

So I have registered for the auction, it will be my first time. I understand I need to pay 10% on the day plus about another £1000 for fees and things. Thats no problem I have that ready to go. Then I need to prove I have the funds available for the rest of it. Well I have the guide price availavle to show them but not much more. I have 28days to pay for it completely so could borrow some from elderly parents.

BitterAndTwisted

If the property goes a lot higher than the guide-price, and most of them do, so you have to borrow from family, what are you going to use for funds to demolish and clear the site, even if you're not going to rebuild?

UserWG47

BitterAndTwisted wrote: »

If the property goes a lot higher than the guide-price, and most of them do, so you have to borrow from family, what are you going to use for funds to demolish and clear the site, even if you're not going to rebuild?

I will do it myself by hand for free. My property butts on to it, and I have experience. I would love to do it myself as a hobby.

you say most go for a lot more than the guide price, I read somewhere that is no always true noadays. There are not many cash buyers left, and its very hard to get a mortgage these days, no chance for a problem property like this.

BitterAndTwisted

Well, you seem to have talked yourself into it, so I wish you the best of luck.

Just hope that there aren't any astute property-developers, or watchers of those "Under The Hammer" TV shows flooding to the auction, lured in by the low guide-price.

UserWG47

gazter wrote: »

You will need planning permission to build on a piece of land, even if a previous property existed and had to be demolished.
Keep that in mind.

I am thinking this will put off other buyers. Its not a very good area, only locals who already want to live here. There is no demand for rentals here or anything.

I have an allotment which is very large but a little drive away from me. I would love to buy this place and view that as my allotment. Just for growing some veg and for the grnadchildren to play.

But if in the future there was a possibility for one of the kids to build again on it thats great.

For now I am trying to do due diligence to find out why the guide price is so low. I have read through all the legal pack which is taking days of study. I have not found any reason to put me off. But still want to pay for proffessional advice before the auction comes.