Modern auction to sell house in poor condition

Mary_Alice

Please can I get some advice- I have inherited a house along with my brother. we are in the process of getting probate and valuing his house. we have a valuation from RCIS and now similar valuations from estate agents. The EA's have said to sell it via a modern auction -( Iamsold-) due to it being very dated with no fitted bathroom or heating. They have said buyers may struggle to get a mortgage to sell in in the usual way so the auction is the way to go.  I looked on their website and obviously it is all positive comments about how simple this method is, but a quick search on here advises to stay clear. Is looks for a buyer the risk is the fees involved but I was told as a seller it will be no more expensive than the normal route. As a seller who cannot do the renovations myself and wants an easy way to sell the property is this method really that bad and can I insist the EA advertises it in the normal way to begin with ?  He was really keen on the auction way due to it's need of heating /kitchen etc 

Doozergirl

No. No no no. 

Modern method of auction is a ridiculous process that puts people off and results in lower sales price for you because the buyer has to pay massive fees which they only knock off their offer price. 

I've attempted to buy this way before with a client and waited 10 months for nothing to happen.  They take your money, give you a one sided contract where the vendor isn't committed to do anything.  We ended up getting the money back and buying the house next door.  

We just looked again at a flat for our son and just couldn't bothered with it all.  Especially when looking at £6,000 of estate agent fees on a property worth about £100k.  Ridiculous when you can pay .75% on a property worth many hundreds of thousands and therefore pay a lot less.  Then there's the very strange quirk of the auction occurring at some random point in time dictated by the estate agent.  It's just weird.  Had it been a regular auction, we'd  have done the due diligence and been prepared to bid, but not this stupid way.  

These MMA companies just seem to take advantage of inexperienced sellers, in my
opinion.   If it is unmortgageable then a regular auction where both parties are bound by exchanging proper contracts and you understand what the fees are is a decent option.  If it is mortgageable then just stick it on the open market. 

I've been involved in buying and selling for over 20 years and there is no situation where MMA is an ideal situation for anyone.   

Slithery

Avoid. You'll get more interest and probably a higher price by putting it in a standard auction.

Agents love the modern method because they don't ever actually have to sell the property but they can get thousands in fees each time they find an interested buyer, even if they then pull out after a survey.

YoungBlueEyes

What actually makes a property unmortgageable?

Swipe

YoungBlueEyes said:

What actually makes a property unmortgageable?

Normally no kitchen

MaryNB

YoungBlueEyes said:

What actually makes a property unmortgageable?

Properties with major structural defects, major damp or subsidence, non standard construction, no kitchen, no bathroom, leasehold with less than 70 years left on the lease, leaseholds with ground rent that doubles every 10 years, flats in blocks with high risk cladding. 

Some lenders won't grant mortgages properties above or next door to commercial properties (especially thinks like takeaways), properties in an area with a high concentration of council properties. 

Mary_Alice

YoungBlueEyes said:

What actually makes a property unmortgageable?

The EA says that its due to it not having any heating or kitchen, BUT when i "googled " it it says a kitchen is classes as just a sink with hot/cold water- which it has and it does have a working gas fire in the lounge, and one in the main bedroom. I don't know anything about buying and selling houses/probate/ etc but I am not totally naive so came on here - glad I did now. The house was valued at £120,000 and the EA said to have a reserve price of £115,000 so that's why I thought it was Ok until I came on here . I am just sooo confused now - can I insist on them offering it for sale in a standard way or will I have to find another agent??

walwyn1978

Say you want it sold in the normal way. If the EA won’t do that, find one that will. 

eddddy

For comparison...

• You could go for the modern method of auction where the buyer has to pay a 6% (minimum £6k) reservation fee to the auctioneer. So maybe the buyer reduces their bid by 6% to compensate.

Or

• You can find an EA who'll sell it by 'informal tender' for perhaps a 1% fee. 'Informal tender' means it will be advertised normally (on Rightmove etc) with a guide price until a closing date (maybe 2 or 4 weeks). And people can submit their offers. At the end of the 2 or 4 weeks, you take a look at all the offers, and decide which to accept (if any).

Here are some examples of Informal Tenders:

https://www.rightmove.co.uk/properties/119755400#/
https://www.rightmove.co.uk/properties/119454056#/
https://www.rightmove.co.uk/properties/119724335#/
https://www.rightmove.co.uk/properties/109818974#/
https://www.rightmove.co.uk/properties/109211858#/

Loza2016

I bought a 1950s bungalow in 2020 that was in bad condition, boiler condemned & kitchen was a sink & basically a shelve unit. 

Couldn’t get a mortgage on it but it still sold through a normal agent. It had a few offers from cash buyers and we actually paid 5k over asking price. 

If it’s in a decent area & decent plot it’s still possible to sell the normal way.  

canaldumidi

Agree with all the above. As a buyer, if I see modern auction method I just move on to another property.

Either sell the traditional way, but price it realistically based on condition and make sure the EA marketing material makes clear it is a doer-upper, or put it in a 'normal' traditional auction where it gets sold the moment the hammer falls.

And avoid this estate agent who is thinking of maximising his fees, not maximising your sale price or finding you a buyer fast.