Buying at auction / pre bidding before auction

fashionvictim

We've instructed to put our flat on the market and I have a AIP for mortgage to buy somewhere new.

I've seen a property that is being sold at auction, but accepting pre-auction bids. I love this manky property and I want to buy it.

I want to do pre-auction offer, so I can hopefully agree on a competition date a bit longer than the usual for auction (I hope as need to sell)

My parents will lend me the 10% deposit to make an offer or bid whilst my flat sale goes through.

How do I know my bank will lend on the property? Can I get them to go around before I bid or pre-offer.

I rung my current lender today, but they said I need to have my offer accepted on the property before they will visit to do the valuation assessment. I tried explaining but no mortgage advisor appointments are available in any branches in next 2 weeks, apply online they say :mad:

The place needs modernising but has a kitchen, bathroom, freehold and I don't think it's falling down, but I'm not an expert. How can I tell it is worth it to the mortgage company?

Dan-Dan

It doesnt sound like you will make it in time , your flat isnt under offer yet , and typically ,being leasehold , conveyancing `may` take longer than a standard freehold sale

Wouldnt set your heart on this `manky` property , if i were you

fashionvictim

Dan-Dan wrote: »

Wouldnt set your heart on this `manky` property , if i were you

Ha ha depends if a nice bungalow in need of modernisation catches my eye.

They make buying at auction look easy on TV !!

eddddy

If you need to sell before you can buy, you really aren't in a position to make unconditional pre-auction offers. You should really have all your finance in place (including a firm mortgage offer), before you make an offer/bid.


But anyway... is it a conventional auction, or a so-called 'Moden Auction'?

If it's a 'modern auction', don't forget the £6000 fee you have to pay to the auctioneer. But at least your losses are limited to £6000 if you win at auction, but then can't get a mortgage.


If it's a conventional auction, the property almost certainly isn't mortgageable. (If it's mortgageable, why wouldn't the owner sell it through an EA and get more money?) And if you win at this type of auction, and then can't get a mortgage, you stand to lose much more money,

happylucky

The standard protocol for pre-auction bids is that exchange of contracts inc the 10% deposit (and applicable fees such as auction house fee, search credits, vendor legal credit etc.) actually has to be done prior to the auction date.

It's not that you can verbally agree a sale prior to the auction date; it has to be a full legally binding exchange.

I would assume this is the case here unless you have info to the contrary (?). When is the auction date?

fashionvictim

happylucky wrote: »

The standard protocol for pre-auction bids is that exchange of contracts inc the 10% deposit (and applicable fees such as auction house fee, search credits, vendor legal credit etc.) actually has to be done prior to the auction date.

It's not that you can verbally agree a sale prior to the auction date; it has to be a full legally binding exchange.

I would assume this is the case here unless you have info to the contrary (?). When is the auction date?

Yes this is the case, it would be immediate exchange if I made an offer that was accepted - the same as if I bid at auction at the end of the month.

My only thinking on doing a pre-auction offer, was I could say I can only exchange, if we can set a competition date to accommodate my flat sale. So I would need legals set up with a solicitor.

My question is about getting the mortgage set up. How do I get this arranged before technically having my offer accepted.

This is my phone call to my current lender:

My lender...have you had your offer on a property accepted? ...

Me... err no but

My Lender.... Phone us when you've had your offer accepted

ME... :mad:

Cheeky_Monkey

fashionvictim wrote: »

Yes this is the case, it would be immediate exchange if I made an offer that was accepted - the same as if I bid at auction at the end of the month.

My only thinking on doing a pre-auction offer, was I could say I can only exchange, if we can set a competition date to accommodate my flat sale. So I would need legals set up with a solicitor.

My question is about getting the mortgage set up. How do I get this arranged before technically having my offer accepted.

This is my phone call to my current lender:

My lender...have you had your offer on a property accepted? ...

Me... err no but

My Lender.... Phone us when you've had your offer accepted

ME... :mad:

Not a chance IMO.

The whole point of the vendor taking it to auction is for a very quick sale. If they were prepared to hang around waiting for you, they might just as well put it on the open market.