Buying via auction

khiller1988

Hello, I'm looking to buy my first house! We have a deposit but we are on a tight budget. I have seen a couple if properties that are going to auction in my area and I was hoping for some advice from someone that's bought via auction. We will be funding via a mortgage.
Does anyone know if the price listed for the property, is this a realistic price or do sites massively lower them? Also can I bid with a mortgage in principal? With mortgage in principal is this likely to be what you will get when actually applying?

Any other help would be much appreciated!

Marktheshark

You will need cleared funds usually within 7 days of the hammer or the deposit is lost in full.

If you do not understand what cleared funds are, stay away from the auction house.

G_M

* Price listed is a guide. Could sell for much more or much less.

Before bidding you must
* have completed any survey you want/need
* have checked the legals, or had a solicitor check for you
* have cash in the bank for the full amount, or a confirmed mortgage offer (so application fee paid, mortgage valuation completed, and mortgage confirmed)

That means paying out before you bid. If your bid wins, you cannot back out for any reason without paying huge penalties

1) google 'property auction' for ots of sites with information
2) attend several auctions before going to one where you want to buy

khiller1988

Thanks, I am aware of what cleared funds mean yes! If I was to apply for the mortgage and didn't get the property, would I need to reapply again if we were about to go for another property?

G_M

Of course.

You apply for a mortgage for a specific property. Both you and the property have to be acceptable to the lender.

davidmcn

Marktheshark wrote: »

You will need cleared funds usually within 7 days of the hammer

I haven't come across auctions which required completion within 7 days - I would say 28 days is more typical.

Caz3121

maybe visit a couple of auctions and get a feel for how prices compare to the guide price (every property will be different)
If your budget is tight, this may not be the way to go as you need to spend out up front to even be in a position to be able to place a bid...if the bidding is over your maximum then all that is lost
also be aware that some properties are not mortgageable so may be in an auction for that reason...to find a cash buyer

marksoton

Naive FTB + auction = Potential car crash....

Clutterfree

marksoton wrote: »

Naive FTB + auction = Potential car crash....

I agree.

Plus add a mortgage into the mix... :eek:

Cheeky_Monkey

Marktheshark wrote: »

You will need cleared funds usually within 7 days of the hammer or the deposit is lost in full.

If you do not understand what cleared funds are, stay away from the auction house.

That is not true at all.

I have bought a house at auction and arranged my mortgage within the 28 days before completion.

G_M

Cheeky_Monkey wrote: »

That is not true at all.

I have bought a house at auction and arranged my mortgage within the 28 days before completion.

OK - so it worked for you in that case.

What would you have done if the lender(s) had turned your application down?

I might as well say that when I last drove up the M1 I did 100 mph and did not get stopped/fined, therefore it is OK for everyone to break the speed limit because they will not get stopped/fined.

(though I agree 28 days is more usual than 7 at auctions.)