Will I lose £6k?

HouseBuyer77

Does the 6k actually go towards the purchase cost?

As I understand it 6k goes to the auction house. You still have to pay the full price you offered to the vendor, so you need to pay £87k, £81k offer to the vendor, £6k to the auction house.

and they also said I'd have no problem completing within the time frame, paying the £6k would enable them to take the property off the market and secure the deal

They don't need £6k to take the property off the market it's just they want £6k (important difference, they way you've worded it sounds as if they have to keep marketing the property and the vendor has to keep considering other offers until you pay £6k).

as long as it wasn't down to myself dragging my feet and not doing my bit then it ought to be a bit flexible as at the end of the day they want to sell the property. I said ok can I have that in writing then? He laughed and said just speak to the auction co and it'll all be fine.

I doubt the contract you'll sign saying you own them £6k will have any such flexibility.

In general it seems the 'Modern Auction Method' is just a giant scam. One could imagine an auction method that's got a bit more flexibility than the ordinary auction method (i.e. you're not exchanging contracts when the hammer falls) that doesn't involve paying £6k to a middle man.

mikeopvc

I told them I was paying no more than £81k so it had to include the £6K, my winning bid is £75k

I think paying the £6k does get them to stop marketing the property, I copied the following from property details:

Upon close of a successful auction or if the vendor accepts an offer during the auction, the buyer will be required to put down a non-refundable Reservation Fee of 3.5% to a minimum of £5,000.00 + VAT (£1,000.00) = (£6,000.00) which secures the transaction and takes the property off the market

So once I pay the £6k then the property is mine as long as the solicitor and lender do their bit on time, Is there a fast track service for solicitors? I've had one solicitor recommended to me twice now and he charges around £400 + VAT plus searches which have already been done.

alfred64

O.P`seems`content`to`proceed`and`ignore`advice`which`he`was`asking.

dlmcr

OP

Why are you playing along with this ridiculous method of buying property? Go to the land registry site, pay £3 get the name and address details of the owner and contact them directly with your offer and see what they say. So many people on here have said the modern auction is a scam, I personally would never even consider a situation where I would as a buyer have to pay £6k for nothing even with the danger of losing the money with nothing to show for it. The more people that get suckered into this nonsense the longer it will stay around for.

mikeopvc

alfred64 wrote: »

O.P`seems`content`to`proceed`and`ignore`advice`which`he`was`asking.

Sorry if it appears that way, I'm not ignoring the advice I really just want to get as much information as possible.

mikeopvc

dlmcr wrote: »

OP

Why are you playing along with this ridiculous method of buying property? Go to the land registry site, pay £3 get the name and address details of the owner and contact them directly with your offer and see what they say. So many people on here have said the modern auction is a scam, I personally would never even consider a situation where I would as a buyer have to pay £6k for nothing even with the danger of losing the money with nothing to show for it. The more people that get suckered into this nonsense the longer it will stay around for.

I have no intention of risking the money, I can't afford to lose £6k and my wife would kill me if I did. I might be the winning bidder but I won't part with any cash unless I know for sure that I won't get ripped off, I'm going to call the auction co and ask if there is any flexibility and also if I could get something in writing from them and the vendor saying so.

BTW I already have the vendors name and address as the auction co sent it to me as part of the buyers information pack, It did cross my mind about contacting them direct but I thought maybe that was illegal in some way?

marksoton

mikeopvc wrote: »

BTW I already have the vendors name and address as the auction co sent it to me as part of the buyers information pack, It did cross my mind about contacting them direct but I thought maybe that was illegal in some way?

It's not. But the sticking point might be the contract the vendor has with the auction co.

stator

RUN AWAY.

This type of deal is NOT in your interests.

FIND ANOTHER HOUSE without this scam.

The MORTGAGE ADVISOR who works for the ESTATE AGENT is NOT looking out for your interests. He is part of the SCAM.

RUN AWAY

STOP TALKING TO THEM

Estate Agents are EXPERTS are LYING to YOU and trying to convince you to do things that are NOT in your interests.

RUN AWAY

Anything they say to you (especially anything said over the phone or in person) is NOT WORTH THE PAPER IT'S NOT WRITTEN ON.

RUN AWAY

eddddy

So it sounds like you're happy to pay £87k for the property.

Before paying the £6k to the Auction co, the very least you should do is pass the legal pack over to your solicitor and ask him/her to tell you if there is anything which is likely to be an issue for the mortgage lender, or anything that you should be concerned about.

Is your solicitor happy with the searches, or will they want to do them again?

I assume the legal pack contains a completed 'Sellers Property Information Form, 'Fixtures and Fittings Form' etc - are you happy with those?

There is no guarantee that the seller will reply to any pre-contract enquiries, so do you know everything you need to know about the property?

e.g. extensions without planning consent, alterations without building regs, plans to build sewage farm next door, neighbours from hell, progressive subsidence, ...etc

I suspect that if you back out for any of the above reasons, you lose your £6k.

Similarly, if you get a survey and it's bad so you decide to back out, I suspect you lose the £6k.



Does the Reservation Agreement mention any conditions under which the deposit is refundable?

Bonfire_Bride

Dodgy, Dodgy, Dodgy!