Buying a House at an auction

Cognito

thanks for your reply, that's what I wanted to know

what you say about the seller's motivations is obviously in the back of my head (though perhaps should be at the front), but couldn't there be another reason, like they want a quick sale, or they "think" they might actually get a better price at an auction?

eddddy

Cognito wrote: »

...they "think" they might actually get a better price at an auction?

Even if somebody really thought that, after speaking to the auction house and EA they would realise.. but let's say they are that 'deluded'. So for example:

- An EA says he can sell your house for £250k
- An auction house estimates they can sell you house for £200k

The 'deluded seller' ignores the auctioneer and "thinks" they can get more than £250k at auction, so sets a reserve of £260k. (So the house doesn't sell, and everyone's time and money is wasted.)

Cognito wrote: »

... they want a quick sale,

Possibly - but put yourself in the seller's shoes. Using the example above, you would need to be very desperate to "throw away" £50k.

And again, using the example above, if £250k is a realistic market value - tell the EA to market it at £225k, and you would probably get a very quick sale, and only lose £25k.

AdrianC

ruggedtoast wrote: »

Just bear in mind that the 'guide price' is not any indication of what the property will sell for. It is usually many thousands of pounds below the reserve.

And, even then, "bidding fever" can see some very bizarre results.

There are two flats-plus-shops for sale in a town near to us. They're all fairly similar, and within 100m of each other.

One is an immaculate, freshly refurbished flat plus a very tidy but unlet shop. It's been on the market at £140k for a while.

One is a tidy shop, already let to a small and apparently successful local chain. The flat, otoh, needs heavy internal refurbishment. Both shop and flat are smaller than the first. It's been on the market at £80k for a while.

Then there's a third, recently auctioned. The smallest of the three, both flat and shop need absolutely gutting, a new roof, new windows, EVERYTHING short of four new walls. The guide price was £30k. It sold for nearly £70k...

Cognito

thanks a lot, eddddy I honestly appreciate it...

nice story, AdrianC.

HARSA

Can tell you how mine went or is still going . The below are threads I started relating to the same process and have had some very good advice from the good MSE guys & of course ladies.

As you can see I had a lot of internet time reading pretty much anything that returned "auction" as a key search word.

The property was 100-120k (which I can afford to pay for cash) price but due to the location and the interest it generated I knew this was likely going to cost a lot more than the guide price.

I ended up paying 180k in what was a very tough going auction. There were 7 of us going for it up to to the 170k mark

Since I knew that my shares and savings of 120K wasn't going to get me the house. My wife and myself applied for 100k mortgage - paid surveyor fee of £315, and two timber and damp proof surveyor fees of £40 each to two different companies. The builing is a wreck and should cost about £15k to get right although yet to get a builder's quote.

The timber and damp proof guys cost is 4k and 5k + Vat Reckon need another 10-15k for plaster boards, ceiling boards, new bathroom and sort out the long conservatory.

Also got a solicitor to check out the legal pack more so on the restrictive covenant to which he assured us should not be a problem to extend the property and on the same height restriction as adjourning properties.


The auction was a very tense affair and tonight was the first time i have seen one live aprt from Homes under the hammer.

The experience was nothing like the program. it was that tensed that at one point being the highest bidder I bid against myself without realising:rotfl:

Anyhow got the property at 40K more the the max guide price. So off to see the solicitor tomorrow. He has done some work already and the bank has sent the paperwork to him ready to release funds.

I started the whole process about 6 weeks before I went to the auction.

Gl

https://forums.moneysavingexpert.com/discussion/4815609=

https://forums.moneysavingexpert.com/discussion/4812621=

https://forums.moneysavingexpert.com/discussion/4819266=

Cognito

thanks a lot for this, HARSA. it gives me a good idea of how things (might) work... wish you all the best with your new home

Basil74

I've spotted a property that is going to auction, the situation appears to be that the local council have taken possession of it as there is no actual record of an owner with the land registry, the ad says ''there is no categorical assurance towards the granting of absolute title can be made following completion of the sale, however the Land Registry MAY award possessory title''??


Does this basically mean you could win the property but still not own it?

HARSA

Basil74 wrote: »

I've spotted a property that is going to auction, the situation appears to be that the local council have taken possession of it as there is no actual record of an owner with the land registry, the ad says ''there is no categorical assurance towards the granting of absolute title can be made following completion of the sale, however the Land Registry MAY award possessory title''??


Does this basically mean you could win the property but still not own it?

I saw the same thing on Homes under the hammer where someone bought the property at auction that is own by awol owner.

He applied with landreg to change the title deed into his name after two years.

However don't quote me on this:D

kingstreet

Title reconstruction is not complete until ten years has passed, so during that time, the real owner can turn up and claim the property back. You can insure against that and the legal costs of defending such a claim.

If you try to sell, your buyer may have problems getting a mortgage, the achievable price may be affected...

AdrianC

Basil74 wrote: »

I've spotted a property that is going to auction, the situation appears to be that the local council have taken possession of it as there is no actual record of an owner with the land registry, the ad says ''there is no categorical assurance towards the granting of absolute title can be made following completion of the sale, however the Land Registry MAY award possessory title''??

Does this basically mean you could win the property but still not own it?

Exactly that.