Auction - questioning guide price

ReadingTim

lola62 wrote: »

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.

In which case, despite all the talk of auctions, guide prices and reserve prices and the likes, the question is really "can I afford this house?" , and the answer is probably "no".

Sorry if you find this both rude and less funny than the last post, but you're probably going to have to move on from this one.

eddddy

lola62 wrote: »

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?

So it's "Modern Method of Auction" - which is a conditional auction.

That's very different to a conventional auction. It works roughly like this:

• You won't be bidding to buy the property, you will be bidding for the right to reserve the property at the price you bid (the reservation period is often 8 weeks).

• The reservation fee is usually a minimum of £6k. (That's £6k in addition to whatever you bid. That £6k goes to the auctioneer, not the seller.)

• So then you will have 8 weeks to decide whether you want to proceed with the purchase - based on survey results, search results, mortgage application etc.

• If you decide not to proceed, you won't get your £6k reservation fee back (the auctioneer keeps that).

lola62

AdrianC wrote: »

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.

This is useful info - we knew it wasn't standard and that there would be additional fees (we really do love this house!) but it does sound like online auctions are a bit of a scam in most cases

We're semi expecting it to not sell at "auction" and potentially land back with an EA - it's been listed previously with (of course..) bl**dy PurpleBricks though...

lola62

eddddy wrote: »

So it's "Modern Method of Auction" - which is a conditional auction.

That's very different to a conventional auction. It works roughly like this:

• You won't be bidding to buy the property, you will be bidding for the right to reserve the property at the price you bid (the reservation period is often 8 weeks).

• The reservation fee is usually a minimum of £6k. (That's £6k in addition to whatever you bid. That £6k goes to the auctioneer, not the seller.)

• So then you will have 8 weeks to decide whether you want to proceed with the purchase - based on survey results, search results, mortgage application etc.

• If you decide not to proceed, you won't get your £6k reservation fee back (the auctioneer keeps that).

Super useful - we knew the process steps, but it's much clearer having it laid out like this (especially as a comparison to a standard auction)

hazyjo

Wouldn't touch a modern auction with a bargepole. From my experience, they're for the deluded. I was going to ask after your first post, but you threw me with 'auction house' so I presumed it was an actual auction.


Two very different things.

eddddy

lola62 wrote: »

This is useful info - we knew it wasn't standard and that there would be additional fees (we really do love this house!) but it does sound like online auctions are a bit of a scam in most cases

We're semi expecting it to not sell at "auction" and potentially land back with an EA - it's been listed previously with (of course..) bl**dy PurpleBricks though...

So is this Purplebricks auctions?

Arguably, you could bid at auction up to £6k below whatever you think the house is worth - to account for the £6k fee.

Except that, if the survey or searches show up problems, and you decide to walk away - you'll be £6k down.


Alternatively... you can make an offer through the auctioneer (before or after the auction), but saying clearly that it does not include a reservation fee, and you will not pay a reservation fee.

The auctioneer might protest, but they have to pass the offer on to the seller.

If the seller accepts the offer, the seller will probably have to agree to pay the auctioneers fee of £6k.

But that way, you won't lose £6k if you later walk away.

lola62

eddddy wrote: »

So is this Purplebricks auctions?

Ah it's not actually - but it's been listed with PurpleBricks as the "estate agent" previously - so we assume it will land back on there if it flops at this conditional auction

AdrianC

OP - a question...

What is so special about this house?

You know it's overpriced, you know the vendor's a fruitloop, you know it's going to be a ballache to buy it. So WHY THIS HOUSE?

lola62

AdrianC wrote: »

OP - a question...

What is so special about this house?

You know it's overpriced, you know the vendor's a fruitloop, you know it's going to be a ballache to buy it. So WHY THIS HOUSE?

Haha, valid question!

Entirely sentimental reasons! We do really love this house - we've been looking a while and it's the first one we've found that we both feel strongly about.

But also, we're know there will be other houses and can see that dealing with this fruitloop is likely not worth our time (or ballache!)

Just thought it was worth a little more investigation before ruling it out entirely

supa34

Most of the times the guide price in auction is lower than market value. This is to get people interested into the room and make a bid thinkng they will get it at guide price. After a few bids, they get macho and want to win the auction and it ends up going for more than guide. So a high guide price- in your opinion- doesn't make sence. It will go a few bids over that.

For example last auction I went to house at 95 went for 135 and I got a house that was at 190 and went for 200.