Modern auction to sell house in poor condition

getmore4less

The house was valued at £120,000 and the EA said to have a reserve price of £115,000 

Do some due diligence on Rightmove for what's been selling and the kind of asking prices to see how realistic that pricing is.

Get it ready for marketing and when you get closer to applying for the grant of probate pitch it to attract buyers looking for a promp sale


Avoid MMA

Mary_Alice

eddddy said:

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#/

Thank you for taking the time to post these examples, I like this idea as it may get more opportunities and doesn't feel as desperate , i will certainly look int  it 

london21

A normal auction would be better than I am sold. The fees are eye-watering.

minimum fees £6,000 or 4.2% of the purchase price, whichever is greater.

It puts a lot of potential buyers off.

NameUnavailable

If you want to sell it quickly and will least hassle then put it up for auction with a 'proper' auction house - they take bids on the day and it sells to the highest bidder (as long as it's hit the reserve). Contracts are exchanged immediately and you complete usually 2-4 weeks later.

You could put it up with an EA (not the one you're talking to now!) but I expect you'll get a lot of time wasters, people who think they can do a project but then can't get the mortgage etc.

princeofpounds

Mary_Alice,

it sounds to me like it would be mortgageable after all. Mortgage lenders differ in their expectations of what a kitchen is, but generally it's somewhere with a sink with running water (and so a drain as well), that is a sealed containable space (has doors, walls and windows). That's it. Probably the only other things they could ask for would be a power point with an electric hob or microwave plugged it, and a little bit of counterspace, like a table. 

It is almost always worth putting in a temporary kitchen to create a mortgageable property if practical. It costs very little (maybe even nothing depending on your starting point) and could return you thousands and a much quicker sale.

I will echo what everyone has said about MMA. Don't do it. If you are not in an urgent situation, sell traditionally with marketing making the condition of the property clear. If that doesn't work, be a bit aggressive on lowering the price. If that doesn't work, move to traditional auction.

Be prepared for the kitchen question to come up in a mortgage survey, so try to get the buyer to prioritise that so you know where you stand without waiting months.

There are always quite a few people around who want properties they can do work on, demand may not be as bad as you think if priced appropriately.

Dump this agent - they are not looking after your best interests. You can almost guarantee they will also filter buyers based on their likelihood to use the agent's recommended conveyancer and surveyor rather than for your benefit. 

zagubov

princeofpounds said:

Dump this agent - they are not looking after your best interests. You can almost guarantee they will also filter buyers based on their likelihood to use the agent's recommended conveyancer and surveyor rather than for your benefit. 

This ^^^^^.
The Modern Method of auction is the answer to a question no buyer or seller ever asked.
You might as well market it as a Japanese knotweed farmhouse or a converted asbestos factory.
Potential buyers would run a mile.

Markneath

Put it for sale at a realistic price the normal way and it will sell, do the bare minimum to make it okay to get a mortgage if need be.

Mary_Alice

Thanks for all this advice, I have probate now and the house went up for sale with the usual method  today( not Auction) I have had several messages from the EA today with 16 viewings booked for next week. The house is fully empty and vacant now so he said there would be a lot of interest. The booked appointments are a mixture of private buyers with 6 developers. They said he would phone me with any offers and guide me to select the best one, but I will be choosing. so how do I chose and what happens next ?

sidneyvic

Any agent that even offers modern method of auction should be avoided.
Find a decent honest local estate agent and list it with them.

eddddy

Mary_Alice said:

I have had several messages from the EA today with 16 viewings booked for next week.

...
They said he would phone me with any offers and guide me to select the best one, but I will be choosing. so how do I chose and what happens next ?

With that much interest, maybe you want to decide on a deadline for offers (e.g. 2 weeks) - and then review all the offers that have come in.

Obviously, the key thing to look at is the amount offered.

But it makes sense to look at "proceedabilty" as well. For example, maybe ignore offers where they say stuff like "my current property isn't on the market yet, but I'm sure it will sell very quickly once it is."


Personally, I wouldn't be too swayed by people who say they can complete super-quickly. I'd be happy to wait an extra 3, 4 or 5 weeks if it meant I'd get an extra £5k.

(And some of the developers might be "friends" with the EA, so be a little cautious if the EA suggests you take a lower offer from a developer.)