bond wolf auctions

thelittlewolf

hello everyone
i have registered to bid at this weeks online auction with bond wolf auction. the properties up in hull all have a guide price of just £10000. i have only been to one property auction before so i am hardly an expert. should i win the auction i know theres 10% to pay on the day (£5000 minimum) and bond wolf charge admin fees of 1200 plus vat. however i read their legal pack they also have a buyers premium of £7999!! that sounds like a rip off to me. especially when the other auction companies charge a buyers premium of £900. they also threaten to sue buyers and thats before the auction. 
does anyone have any experience of bond wolf auctions?
thank you
  

ciderboy2009

It costs the auction house the same to sell a house with a guide price of £10k as it does to sell one with a guide price of £1M so I can fully understand why they charge a fixed buyers premium.  Would you still think it was a rip off if you were buying a property worh £100k?  £500k?  £1M?

At the end of the day, if you don't like the terms of their auctions then don't bid with them.

AdrianC

Surely the only relevant and important figure is how much in total you end up paying to buy the house... How that figure is broken down is irrelevant to the buyer - it may be relevant to the vendor, of course, as it breaks down how much of that figure reaches them.

The next question, of course, is whether a "£10k" property in Hull is actually somewhere you want to own. Or a "£5k" one in Coventry or Brum or...

Fine example:
https://www.bondwolfeauctions.com/properties/112268-property-auction-coventry/
That's number 57. It's not sold for years, and is unregistered. But number 47 sold in 2019 for £97k, number 53 in 2019 for £106k, number 91 in 2017 for £110k.
Pause and remind yourself of how auctions work.
If somebody else wants that property as well, the price goes up, until only one person is happy paying that amount.
If it ends up for £5k, then why? Because nobody else thinks it's worth more. Including local builders and property investors, with access to far better information, and to cheaper materials and labour than you. So what do they know you don't?

So is it a total moneypit, or is it going to end up selling for a chunk more than £5k + fees? Because you can bet it's one of those two, possibly both.

hazyjo

Are you sure it's not "modern method of auction"?

Most of us would avoid like the plague!

SpiderLegs

AdrianC said:

Surely the only relevant and important figure is how much in total you end up paying to buy the house... How that figure is broken down is irrelevant to the buyer - it may be relevant to the vendor, of course, as it breaks down how much of that figure reaches them.

The issue is that a significant proportion of that total is no longer related to the completion of the sale, so therefore becomes a sunk cost.

Doozergirl

hazyjo said:

Are you sure it's not "modern method of auction"?

Most of us would avoid like the plague!

Bond Wolfe is a 'proper' auctioneer.  Birmingham based. 

I've looked at this auction.  There's a property I'm interested in that has a sensible guide.  Many of the others are insanely low.  

I was looking at one with them last year that had a guide of £49k, which I thought was silly at the time (house sold for £180k and then is under offer, fully renovated for £300k), but the guides in this one are really silly.   £10-12k for similar properties.  

Considering the guide prices and social distancing measures, the block viewings must last forever or not be safe.  

They can put whatever they want in the packs, it's a good job you spotted it, OP.  

AdrianC

SpiderLegs said:

AdrianC said:

Surely the only relevant and important figure is how much in total you end up paying to buy the house... How that figure is broken down is irrelevant to the buyer - it may be relevant to the vendor, of course, as it breaks down how much of that figure reaches them.

The issue is that a significant proportion of that total is no longer related to the completion of the sale, so therefore becomes a sunk cost.

In what way?
With regard to future CGT liability? Or...?

Doozergirl

SpiderLegs said:

AdrianC said:

Surely the only relevant and important figure is how much in total you end up paying to buy the house... How that figure is broken down is irrelevant to the buyer - it may be relevant to the vendor, of course, as it breaks down how much of that figure reaches them.

The issue is that a significant proportion of that total is no longer related to the completion of the sale, so therefore becomes a sunk cost.

You account for it in the bid though.  The only one that loses out is the vendor, who has been duped.  

Unless the bidder hasn't read the pack 😬

SpiderLegs

AdrianC said:

SpiderLegs said:

AdrianC said:

Surely the only relevant and important figure is how much in total you end up paying to buy the house... How that figure is broken down is irrelevant to the buyer - it may be relevant to the vendor, of course, as it breaks down how much of that figure reaches them.

The issue is that a significant proportion of that total is no longer related to the completion of the sale, so therefore becomes a sunk cost.

In what way?
With regard to future CGT liability? Or...?

In the way that you are spending that money whether the sale completes or not.

davidmcn

ciderboy2009 said:

It costs the auction house the same to sell a house with a guide price of £10k as it does to sell one with a guide price of £1M so I can fully understand why they charge a fixed buyers premium.  Would you still think it was a rip off if you were buying a property worh £100k?  £500k?  £1M?

Yes, there's going to be a certain minimum cost in selling any lot, but if it costs you over £9k to flog a £10k property you're doing something wrong.

eddddy

SpiderLegs said:
In the way that you are spending that money whether the sale completes or not.

It's an unconditional auction. If you make the winning bid, both parties are contractually required to complete.

(You might be thinking of "conditional auctions" aka "the modern method of auction". That's not the case here.)