Auction - questioning guide price

GDB2222

That last point about surveys sounds all wrong to me. What if the survey shows the house needs masses spending on it?

Perhaps a link at least to the auction firm might help.

AdrianC

lola62 wrote: »

- The seller does appear to have a history of asking too much for the property (ie more than anyone will appear to pay for it)

Which is why he hasn't sold it yet.

Do you think his attitude's changed? If not, save your time.

- The valuations (EA's) we've found have ranged *hugely* - over £210,000 between the highest and lowest (the highest also being *under* the guide price) Would also like to press this isn't a multimillion £ property we're looking at - it's an awfully large percentage! This makes it hard do due dilligence on how much the property should be worth / a mortgage lender would value it - basically balancing "it's worth what someone would pay for it" vs "it's worth what the mortgage company will lend you for it"

Look at other properties. There is not a single property in the country that doesn't have comparables. You might need to jiggle location, size, condition a bit - but you can definitely play "Well, for that money, I'd rather have..."

- Is it every acceptable to ask to see proof of how the guide price was arrived at?

Utterly pointless. It may be as simple as "Well, the vendor insists on reserve of £X, so -10%".

As mentioned by GDB2222, we will have spent a considerable amount of money to get to the point of being able to bid (we also need to secure a mortgage) so if we can possibly root out if the buyer is simply being greedy (again) and has set a guide price significantly over what it's been valued as, we could save ourselves a lot of hassle and just move onto a different property.

Yup, that's auctions...
But, of course, even if you do know and have all your ducks in a row, the guy next to you might simply get hammer fever.

Something else I'd like to check though (might clear up all of the above!!)- we had been guided by the auction house that a survey should be done AFTER the auction (it's an online auction, where a buyers premium is paid to secure the property, and the surveys are done afterwards) It does sound like that's quite unusual and that surveys should be done beforehand?

Oh, it's not actually an auction. It's a "modern auction". Don't walk away, run.

Mutton_Geoff

lola62 wrote: »

The seller does appear to have a history of asking too much for the property (ie more than anyone will appear to pay for it)

There's your answer then. I wouldn't waste any money doing any pre purchase enquiries before you speak to the auctioneer to get their feel for the place. They want to sell it as much as you wish to buy it so you may glean more information that way.

ReadingTim

The OP seems to think that being shown the "workings out" will either make the price more palatable to them, or (more likely) they think that they can point to some flaw in the assumptions or error in the calculations which will make the vendor roll over with the phrase "it's a fair cop guv, my house is well-overpriced - you've got me banged to rights..."

Sadly, that ain't gonna happen.

It really doesn't matter how the asking price was arrived at. It doesn't particularly matter how the selling process is organised. All that matters is whether the buyer and seller can negotiate a price with which they're both happy.

Here it seems the seller is not going to move much on price, despite the fact they're auctioning it, therefore the OP/buyer needs to decide if they're willing to pay an amount in the region of the stated guide price, or not. If not, move on.

lola62

Mutton_Geoff wrote: »

There's your answer then. I wouldn't waste any money doing any pre purchase enquiries before you speak to the auctioneer to get their feel for the place. They want to sell it as much as you wish to buy it so you may glean more information that way.

OK- that's good to know! TBH the auction house seem pretty into their hard sell - they're insistent that there's loads of interest in the property but as far as we know there's been no viewings, no "watchers" on the online viewing and certainly no other bids (the online auction is already running)

Sounds like we do indeed need to leave this one where we found it!

GDB2222

Yes, modern auction. That’s why I asked for a link.

I suggest to the OP that he has a look at a few reviews, eg
https://www.estateagenttoday.co.uk/breaking-news/2019/2/law-firm-warns-over-reservation-fees-in-the-modern-method-of-auction

lola62

ReadingTim wrote: »

The OP seems to think that being shown the "workings out" will either make the price more palatable to them, or (more likely) they think that they can point to some flaw in the assumptions or error in the calculations which will make the vendor roll over with the phrase "it's a fair cop guv, my house is well-overpriced - you've got me banged to rights..."

Sadly, that ain't gonna happen.

It really doesn't matter how the asking price was arrived at. It doesn't particularly matter how the selling process is organised. All that matters is whether the buyer and seller can negotiate a price with which they're both happy.

Here it seems the seller is not going to move much on price, despite the fact they're auctioning it, therefore the OP/buyer needs to decide if they're willing to pay an amount in the region of the stated guide price, or not. If not, move on.

This is a quite funny (although also quite rude) reply. We're mainly concerned about getting into a position where the house isn't mortgagable at what we've paid for it (being inexperienced at auction) and therefore losing out on the considerable fees the above posters have flagged.

GDB2222

Don’t take the rudeness to heart. It’s the price you pay for asking for free advice on a public forum, I’m afraid. Completely par for the course, and not at all personal.

AdrianC

lola62 wrote: »

We're mainly concerned about getting into a position where the house isn't mortgagable at what we've paid for it (being inexperienced at auction) and therefore losing out on the considerable fees the above posters have flagged.

Woah, hold on...

"Lender down-values" doesn't mean "can't buy".

Let's say we're talking about you agreeing a £400k price. You have £100k equity and are after a £300k mortgage. 75% Loan-to-Value mortgage, right?
The lender come along and say "Nope, we reckon you're overpaying, and we reckon it's £350k-worth."

They'll still lend you £300k. You still have £100k equity. It's just that they're going to think of it as ~85% LtV, so you might pay a bit more interest.

And this isn't an auction. It's a sale where the vendor wants you to pay the EA fee (even if the sale falls through), wrapped up in some "Oooh, look, just like eBay!" online hype and guff.

davidmcn

As above, if it's a "modern method of auction" rather than a traditional one then avoid - they're just a rip-off with the agents being the only beneficiary.