Sell property asap but stay in it, advice please

MobileSaver

Rellen said:

Section62 said 

thinking the modern auction route is a good idea is a symptom of the pressure you feel

Why are modern auctions so bad? Is just because of that buyers fee? What is it that makes it a bad for a seller.

Yes, the Modern Method of Auction is a really, really bad idea because of the amount and nature of the buyer's fee.

Firstly (although obviously it depends on the price of the property) a seller will typically pay an Estate Agent between £1,500 and £4,000 in fees so straight away you can see that the buyer is being asked to pay an unjustified massive amount extra of £6,000.

It gets much, much worse though, a seller normally only pays the fees after the property has been sold whereas the Modern Method buyer has to pay the £6,000 upfront and most unbelievably it is non-refundable! So if the buyer decides not to go ahead with the purchase (perhaps they discover something seriously wrong) then they lose £6,000 with absolutely nothing to show for it.

So the Modern Method is a terrible idea for sellers for two main reasons. One, most buyers will be put off from the get go and won't even make an offer. Two, any buyer who is confident the sale will go through would simply knock £6,000 off their maximum asking price so you the seller lose thousands compared to paying the fee the normal way yourself.

Most people here regard the Modern Method of Auction as a scam that only benefits Estate Agents; as can be seen above there are a number of disadvantages to both sellers and buyers with practically no upside.

Rellen said:

It was an unbelievable shock to get the court papers so It’s been a rough few days

With all due respect it can't have been that much of a shock, you must have known beforehand that you were not complying with the terms and conditions of the mortgage you initially agreed to?

housebuyer143

Rellen said:

Ok thank you all so much for explaining. I understand now about modern auctions. 

There’s no way I’d do it if I were a buyer either and if there’s no guarantee other than the buyer losing the fee then I’d be in trouble time wise. 

Ok so cash buyer or traditional auction it is. 

Could I ask some more advice?

so if I put on open market and stated only cash buyer / no chain. Is this through estate agents and is there a way to guarantee a timeline with this option?

 if traditional auction, how does that work? Still through estate agent or with auction house? Do I list it on right move  etc. 

also I know with auction it can go any way but generally how much more does a property go above the guide price?

thank you 

If you list it with a normal agent cash buyers only you could find somebody who is a cash buyer but then later change their mind. They are not committed and they could drop out at any time. There's no way to tie them into a time scale with traditional buying and selling.

With an auction, you would go to an auction company who would do all the advertising and marketing. I think it goes on right move for a certain amount of time before the auction. Ibelieve you're required to pay auctioneer fees of a few hundred and the rest on sale. I have heard you can include your selling costs in the auction so the buyer pays them.
I don't think there's any hard fire rule about what it goes for at auction. If you list it really low then is likely it will go above guide price quite significantly. If you have the guide price quite high, you might get small amount above or it might not sell at all. The company can advise you of the best strategy and what they think the property will achieve. As soon as the hammer falls, the sale is legally binding. So if you took that to your mortgage company they would almost certainly postpone proceedings.

Rellen

Hi

thank you for explaining both sides of modern auction. Definitely not the way to go. 

Also,

MobileSaver said:

It was an unbelievable shock to get the court papers so It’s been a rough few days

With all due respect it can't have been that much of a shock, you must have known beforehand that you were not complying with the terms and conditions of the mortgage you initially agreed to?

I understand why you’d say this but after I couldn’t remortgage, they’d involved legal but assured me it was procedure for end of term. I’d agreed with them that my brother was going to buy as an investment and keep in the family, they were fine as long as a plan was in place. I kept in touch to update but after New Years I got really poorly and missed a few calls and then last week I got the letter backdated the 11th with the court notice. So truly I had no indication or reason to believe they were going to escalate in any way, let alone to apply for repossession. 

RAS

Have you talked to them since? As you need to do that ASAP, even if it hurts.

What's the situation with brother? Is that now off? If so, make sure they know and advise you are actively trying to sell.

Tell them you've been advised not to use modern auctions. And that you are exploring a standard auction or a cash sale. Will they suspend repossession if you get a buyer? Are they prepared to wait for a cash sale? 

Oh, and you've started decluttering.

When you've decided how to sell write to them and let them know the details, and email a copy through.

mi-key

You never really know with an auction if it will meet the reserve, or have a bidding war and go for over it. If you set your reserve at a sensible amount it will get more interest, and if it doesnt reach the reserve but someone is bidding and gets close, you can always negotiate from there and maybe do a deal. They do often go for over though as people can get carried away ! 

Rellen

Hi

housebuyer143 said:

If you list it with a normal agent cash buyers only you could find somebody who is a cash buyer but then later change their mind. They are not committed and they could drop out at any time. There's no way to tie them into a time scale with traditional buying and selling.

With an auction, you would go to an auction company who would do all the advertising and marketing. I think it goes on right move for a certain amount of time before the auction. Ibelieve you're required to pay auctioneer fees of a few hundred and the rest on sale. I have heard you can include your selling costs in the auction so the buyer pays them.
I don't think there's any hard fire rule about what it goes for at auction. If you list it really low then is likely it will go above guide price quite significantly. If you have the guide price quite high, you might get small amount above or it might not sell at all. The company can advise you of the best strategy and what they think the property will achieve. As soon as the hammer falls, the sale is legally binding. So if you took that to your mortgage company they would almost certainly postpone proceedings.

Thanks so much for this.

So if on market even with cash buyer, there’s nothing to guarantee until the actual completion-moving day. I doubt me saying i have a buyer would be enough to make the mortgage co stop proceedings. 

Thank you for info on auctions. Ill start looking for auction company near me. 

Again I know it’s hard to say but does anyone know roughly how much cheaper properties on traditional auctions than market value?

MF2027

About 10 years ago I assisted a friend through threatened repossession because he was in no fit state to cope with it. What I suggest is:

Make sure you attend the court hearing. The judge likes to see that and will be more open to any suggestions you have. Do you have a plan for repayment of the arrears? At the hearing a rep from the bank will be there to work with you to avoid repossession. 

Ask your bank about any assisted sale scheme they have. This is the route my friend ultimately took, and the bank were fantastic - all selling fees were paid by them and they worked with us to get the best price. He was able to stay in the house until it sold. 

RAS

Rellen said:

Hi

housebuyer143 said:

If you list it with a normal agent cash buyers only you could find somebody who is a cash buyer but then later change their mind. They are not committed and they could drop out at any time. There's no way to tie them into a time scale with traditional buying and selling.

With an auction, you would go to an auction company who would do all the advertising and marketing. I think it goes on right move for a certain amount of time before the auction. Ibelieve you're required to pay auctioneer fees of a few hundred and the rest on sale. I have heard you can include your selling costs in the auction so the buyer pays them.
I don't think there's any hard fire rule about what it goes for at auction. If you list it really low then is likely it will go above guide price quite significantly. If you have the guide price quite high, you might get small amount above or it might not sell at all. The company can advise you of the best strategy and what they think the property will achieve. As soon as the hammer falls, the sale is legally binding. So if you took that to your mortgage company they would almost certainly postpone proceedings

So if on market even with cash buyer, there’s nothing to guarantee until the actual completion-moving day. 

Incorrect. With a cash buyer, there is no guarantee until exchange.

If the buyer pulls out after that, they lose their deposit, which would probably be enough to get your mortgage provider to suspend proceedings.

Some good advice from MF2027. But start by talking to the mortgage provider, acknowledge you need to sell, and see if they will suspend action as long as you are seen to be actively working to sell ASAP.

Suggest you report to them weekly, and ask if they any advice on auction firms or even an assisted sales team?

Rellen

RAS said:

Have you talked to them since? As you need to do that ASAP, even if it hurts.

What's the situation with brother? Is that now off? If so, make sure they know and advise you are actively trying to sell.

Tell them you've been advised not to use modern auctions. And that you are exploring a standard auction or a cash sale. Will they suspend repossession if you get a buyer? Are they prepared to wait for a cash sale? 

Oh, and you've started decluttering.

When you've decided how to sell write to them and let them know the details, and email a copy through.

Hi. 

Thank you for this helpful advice. 

I called them immediately and have spoke to them several times and different departments since. 

Unfortunately My brother is out, he’d told me we were on track but I think maybe it wasn’t and now this has happened he’s just taken himself out of the equation. 

Essentially mortgage co not bothered. I tried to get something in place, or them to tell me what can be done to stop it and basically they want their money and need confirmation and only then will they consider taking to management to request stopping court. They will not wait for a normal sale timeline. 

I had 1st valuation yesterday (how I found out about modern auctions!) and now after all this advice I’ll look into traditional auction company near me. 

Also yes, absolutely everything is being backed up by emails and letters from now on. I feel so foolish for taking their word. I’ll never make that mistake again!

thank you so much 

user1977

I wouldn't expect a lender to go ahead with repossession if it's clear that there's a voluntary sale on the go and progressing reasonably quickly. Repossession is expensive and risky, the lender would always prefer to sit back and wait for the money to come in, rather than have to evict, change locks, clear the property, market, etc. Obviously at some point they may decide that the borrower isn't doing enough and step in anyway.