Auction or Regular Sale for My Fixer-Upper with Nightmare Neighbours?

lostmilastaccount

Type your messageI'm in a bit of a dilemma and could really use some advice. I own a house that's a bit of a doer-upper and has some issues that might affect a survey. To give you some context, I did manage to get a mortgage on it previously, but when I tried to sell last year, the deal fell through due to survey results. The potential buyers weren't open to negotiating, possibly deterred by the amount of work needed.

However, the more pressing issue is my neighbors. They're pretty awful – causing property damage, harassment, burning plastic and trespassing. It's become unbearable, especially in the summer months, and I'm keen to move out as soon as possible. Unfortunately, I now have to declare these neighbor disputes on my Property Information Form which could impact the sale.

I'm torn between selling at auction or on the open market. Auction seems appealing as it's more definite – if I get a buyer, the sale is pretty much guaranteed. However, the auction fees are around £3,000. Selling on the open market might be cheaper, but there's the risk of the sale falling through again.

Another factor in my decision is my next move. I'd like to buy another house, but the prospect of going into rented accommodation for a year (with pets) before buying again seems costly and inconvenient.

So, my questions are:
1. Would I be better off selling at auction or on the open market, considering my situation?
2. How should I price my house in relation to the reserve price suggested by the auction valuer?
3. Any tips on balancing the need to sell quickly with the desire to buy another property without a rental interim?

Any advice, especially from those who have been in similar situations, would be incredibly helpful. Thanks in advance!

GDB2222

One advantage of selling by auction is that you choose what to put in the information pack. If you choose not to include the TA6 form, that may put off some buyers, but not all. If you include it but don't answer all the questions, that is your choice, although it may make buyers wonder. 

You mention the £3k auction fees, but don't expect to get top dollar for the property selling by auction. That could make a lot more than £3k difference. 

"the prospect of going into rented accommodation for a year (with pets) before buying again seems costly and inconvenient." - Normally, people sell at the same time as buying somewhere else. I suggest you do this. Set the asking price very low, to incentivise buyers, and in the meantime find somewhere you want to buy!

lostmilastaccount

GDB2222 said:

One advantage of selling by auction is that you choose what to put in the information pack. If you choose not to include the TA6 form, that may put off some buyers, but not all. If you include it but don't answer all the questions, that is your choice, although it may make buyers wonder. 

You mention the £3k auction fees, but don't expect to get top dollar for the property selling by auction. That could make a lot more than £3k difference. 

"the prospect of going into rented accommodation for a year (with pets) before buying again seems costly and inconvenient." - Normally, people sell at the same time as buying somewhere else. I suggest you do this. Set the asking price very low, to incentivise buyers, and in the meantime find somewhere you want to buy!

Hadn't thought about that with the TA6 pack but definitely something to consider thanks. And yes all in all I stand to lose about 20k at auction Vs the open market which would be awful but no price is too great to get away from these people.

I was under the assumption I would have to go into rented since it wouldn't be possible to complete on another house after getting a bid, and I couldn't really start buying before then since I wouldn't be proceedable.

ThisIsWeird

Hi lmla.

Have you done anything about these neighbours? Accumulated evidence? Brought this to the attention of any authority? Kept a record or log?

youth_leader

I sold my do-er upper at auction and it was eye wateringly expensive.  I moved out a month in advance of the auction as a very convenient rental became available up the road from my house.  I was paying rent and bills on both my house and the rented house. 

I paid £795 to enter their catalogue, £1200 for my solicitor to check the legal pack, and a whopping £6,600 fees for my £275K sale.  My rent was £600 per month.  The auction was the first week of lockdown in 2020, so it was on-line, I didn't benefit from any 'competition' in the room - whether it exists or not.  The buyer was using a mortgage, and asked for eight weeks to completion, rather than the 4 I had specified.  I did agree but I had to buy more oil to keep the house heated and as completion approached, he refused to pay the price I'd paid for it.  Very unpleasant.  

[Deleted User]

While you aren't obliged to tell bidders about the neighbours, do you really want to be one of those people? The kind that does that to others?

Maybe you could resolve the neighbour issue. Or just gather evidence and then use it to pursue them for devaluing your property.

NameUnavailable

Have there been formal complaints about the neighbours? Either you or them? If it's maybe something personal and just 'funny looks' or whatever then I wouldn't say you need to declare anything.

Regarding the auction option, if you sell through a proper auction, you can add conditions i.e. the buyer must pay X towards the sellers fees (I sold my last place via auction and did this). The auction company said people would just drop their highest offer if I did this but I know that not everyone reads the T&C's fully!

If you really must get out then do it. When the hammer falls your place is sold. Exchange happens immediately and completion is typically 4 weeks later but again, you can decide and say completion must be a week after.

It's a much less stress free way of selling if you're willing to accept less than usual market value (I say usual because if there were no issues then you'd sell normally, so market value for a property with some issues is perhaps the auction price).

eddddy

lostmilastaccount said:

I was under the assumption I would have to go into rented since it wouldn't be possible to complete on another house after getting a bid, and I couldn't really start buying before then since I wouldn't be proceedable.

I'd tend to agree with you - it would be very difficult to sell and buy at the same time, if you're selling at a traditional auction.

• You don't know in advance whether your property will definitely sell at auction. (So your seller won't know if you'll go ahead with your purchase, until auction day.)

• If your property does sell, you will be exchanging contracts when the hammer drops. It's not possible to say "I'll only exchange contracts on the sale, if I can exchange contracts on my purchase at the same time"

In theory, it could work if you could find a very flexible, accommodating seller who was prepared to sign a conditional contract. (i.e. A contract that said "I'll sell my property to you, if your property sells at auction. If your property doesn't sell at auction, I'll let you walk away.")

But I think you'd struggle to find a seller who would agree to that.

RHemmings

GDB2222 said:

One advantage of selling by auction is that you choose what to put in the information pack. If you choose not to include the TA6 form, that may put off some buyers, but not all. If you include it but don't answer all the questions, that is your choice, although it may make buyers wonder. 

You mention the £3k auction fees, but don't expect to get top dollar for the property selling by auction. That could make a lot more than £3k difference. 

"the prospect of going into rented accommodation for a year (with pets) before buying again seems costly and inconvenient." - Normally, people sell at the same time as buying somewhere else. I suggest you do this. Set the asking price very low, to incentivise buyers, and in the meantime find somewhere you want to buy!

I would really be put off by a lack of TA6 form. And, I also thought when I saw the reference to the £3000 fees that the difference in achievable price might be bigger than that. I haven't attended property auctions for a while, and I think they are less active than they used to be. But, I did see 'nice' houses selling easily. Though, for less than similar houses went for on the open market. I'm curious to attend some traditional auctions again to learn more about them. (Not for myself, but for my son). 

You'd think that Estate Agents would be used to issues such as problem neighbours, and would be able to give good advice. Have you spoken to Estate Agents about this, and what did they say?