House not selling in open market - now at Auction?

Alias_Omega

Hi all -  I am a buyer.

A property that i am interested in, is now subject to sale as part of a court order (divorce).

The property has been listed for sale in the past as the following amounts, however has not been sold -

• July 2018 - £234,950    (Estate Agent)

• Oct 2018 - £224, 995   (Purple Bricks)

Now its been put into an Auction, with a starting figure of £190,000 plus a 10% reserve fee (so £209,000 starting price), the seller also pays zero fees,

The buyer pays it all, so roughly £8100 as a "reservation fee", bringing the total roughly to £216,000.

My concerns - If the house did not sell at £224,995, is it worth the £216,000 ~ definitely not...then what..

It needs -

• A 10 yr combi boiler with no thermostat etc (likely £4k to replace ~ 32kw boiler, 22mm gas pipe, power flush and magna-clean)
• 6 windows have blown the seals (likely £800 to replace as has a lead effect)
• 2 wooden window frames are rotten (likely £500 to replace)
• Old conservatory roof which has been under boarded. Risk of leakage due to age (carry risk of £5k to replace).

I kinda need an old wise grand parent on my shoulder saying £205,000 max or so..

Comms69

Remember that the starting price is not necessarily what anyone will bid on. 

hingston

If no one is willing to pay £216,000 just wait for it not to sell at that?

davidmcn

Is this a genuine "auction" (people sticking their hands up, binding contract when the bloke at the front bangs his gavel) or the "modern method of auction" (which is an estate agent-friendly rip-off)? Sounds more like the latter i.e. it's possible for you to lose the 10% fee with the seller not being obliged to sell. Which I would avoid no matter the price.

AdrianC

That's not an auction. That's a "modern method" auction, which is simply a way of palming off the EA fees onto the buyer.

If you want to pay £205k, tell them £205k, all fees included, and no non-refundable bill if the sale doesn't complete.

jimbog

It's a rip off - run away

pimento

Just so you know, I replaced six blown glazed units with a lead effect for £400.

kazwookie

The housing market in general terms at the moment at a stand still,  (owing to CV)

I suggest you forget about it for now, until these strange times are over, and the market gets moving again, depending on what you read and believe the market prices may go well down or stay the same.

New houses will go on the market and may be better for you.

Personally I'd keep very clear of these modern method of auction sales, as you seem to end up with all the costs.

greatcrested

As above - this is not a 'real' auction.Avoid like the plague.

Tell the agent you're not willing to buy via the 'auction' method, but that if the seller is willing to consider a traditional offer you will be willing to make an offer.

Be sure to read carefully any paperwork the agent puts in front of you......

If/when you do make an offer, do it in writing, making clear that your offer is not made via the auction and is not subject to any fees.

steampowered

So the selling fee is 3.8% .... ouch !

Alias_Omega

Thanks all,

It is a modern-method of auction just like you have said.

The house was up for sale in 2009 for £335,000, so in today's money its quite cheap. The street is £240k and its a nice house.

Its about 75 years old, 4 bedroom etc & council tax band E also, which indicates the area that it is is. Its in the next band of houses, the road has potential for financial growth, unlike all the new-builds popping up everywhere.

Thanks for the heads up on losing the fee, they did mention that if there was no-sale, the fee would be returned. I did not count if the seller pulled out, just the sale falling through to the survey failure etc.

For now, ive thrown a bid in at £190k, its below the reserve fee and the seller flatly called "no". They actually purchased the property 5 years ago for £200k.. so with the £190k plus fee's isnt a bad deal on a forced sale..

Thanks all..