Price Drop

mimi1234

Hi all,

So I went to view a property last week. It's a 2 bedroomed terraced house with an auction starting price of £99K. There weren't many photos on the EA website so thought I would have a look anyway expecting it to be a dump.

The house needs a lot of work. There was damp and mildew everywhere and the house was colder inside than it was outside and it was freezing the day I went to view it! The kitchen ceiling was falling down as was the front room ceiling.

In my mind, I thought it's sort of OK but needs a lot of work so I would not offer more than about £60K for it.

The chap selling the house has said he has had cash offers of £90K so I thought let's leave it. Obviously a lot more than I am willing to pay for it.

The auction agent has been calling me on a day to day to basis. I've told him £99K is far too much as it needs a lot of work doing. I keep getting daily emails from the auction agent as well and there is no one watching the property / auction and there are no interested parties either.

I got an email yesterday saying the starting price has now dropped to £80K.

If the seller had said he had offers of £90K, why would they drop the starting price to £80K or is that in the hope there might be a bidding war? Is this a regular thing?

I'm a first time buyer so being a bit cautious.

Thanks to anyone who might be able to advise.

dwsjarcmcd

The only thing you need to learn is that the EA didn’t tell you the truth! Clearly there was no £90k offer and that was just to get you to up your own offer.

Stick to your guns and never take at face value anything an EA tells you!

PasturesNew

mimi1234 wrote: »

... auction ...needs a lot of work. There was damp and mildew everywhere... kitchen ceiling was falling down as was the front room ceiling.
...

I'm a first time buyer....

Do you know what you're doing? It is unlikely to be easily mortgageable, so you need to have everything signed off before you step foot into the auction room.

hazyjo

Auctions are not usually the place for inexperienced FTBs. Even I wouldn't want to buy at auction and I've bought/sold a fair number of times. Please gets LOADS of advice on this before even contemplating it. As above, many auction properties are unmortgageable. Might not affect you, but will certainly affect resale.

mimi1234

Hi all,

I have enough money saved up to buy it if the price was dropped so I wouldn't need a mortgage.

I forgot to mention I don't want to go down the auction route. When I spoke to the EA when I booked the viewing, they said the seller would take an offer and not go down the auction route if it was what he wanted. Well that's what I was told anyway.

I've read up about auctions and there are fees attached etc which I have no interest in.

Let's see how it pans out. I am sure there will be others out there who are interested in it but not for the price they are looking for.

Thanks for all the tips.

martindow

If you bought would there be fees payable to the auctioneers on top of the hammer price? I've no experience of property auctions but I've had to pay fees of 20-25% at auctions which makes a big difference to how much your maximum bid should be.

csgohan4

Clearly the vendor is delusional and over priced his property,

As above stick your guns and only pay what you think it is worth. You now know you have called the vendor's bluff. Maybe wait until the auction contract is over and pay as a private sale or reduce further to take into account of the fees

MichaelCologne

Only pay the price you want to pay! Is it a lot worth?

G_M

What have other 2 bedroomed terraced houses locally sold for?
In good condition?
How much have you mentally budgetted for renovation?
Ignore everything the seller or agent tells you and just offer what you are willing to pay. It will be accepted or rejected. Everything else is just hot air.

mimi1234

Well there was one that sold in that very street about 2 years ago for close to £85K. It was dated but wouldn't have needed the kind of work (carpets and wallpaper etc) this one would need. Unfortunately, by the time I viewed that one, a neighbour had made a private offer to the vendor and got it for £85K. Well done to them.

Thanks @martindow, I didn't know that there would be an auctioneers fee on top as well if I made an offer. The property is advertised via an EA but it is being auctioned via an auction house. When I booked the viewing, I asked the EA if the vendor would accept an offer without going via the auction route, I was told yes. I had thought this would just be like a normal offer on a property route, obviously I was wrong.

I wouldn't pay more than £60K for it as mulling it over, the cost to have it done up would be a fair amount (new kitchen and bathroom, a lot of the ceilings needs doing again, electrics, the gardens are an absolute nightmare - think mini jungle on both sides and various other things). Also, once a survey has been done, there might be other work that needs doing to it.

I am glad I started this thread. It just goes to show how uneducated I am with auctions etc.

Thank you to all of you for your advice. It is much appreciated.

Crashy_Time

csgohan4 wrote: »

Clearly the vendor is delusional and over priced his property,

As above stick your guns and only pay what you think it is worth. You now know you have called the vendor's bluff. Maybe wait until the auction contract is over and pay as a private sale or reduce further to take into account of the fees

Many do, it is understandable though maybe, after the bubble that happened in property prices?