Making Private Treaty offer on MMOA

r_t_

Hi,

I’m in the process of looking for a first investment property, but am finding that so many are now listed as Modern Method of Auction, and for various reasons I am not prepared to take the risk on buying this way.

I’m currently very interested in two properties that are being sold this way. One went to auction last month, didn’t sell and is back on now with a reduced starting bid, with the auction ending on Friday. No bids so far - I expect the method of selling is putting a lot of buyers off because it seems to me to be worth far more than its current starting bid.

Assuming it doesn’t attract any bids this time, I would like to send an email to the agent at the end of the auction making a decent offer (probably 20% above the starting bid), but saying that we only be prepared to by via Private Treaty.

My question is, does anyone have any experience of doing this? Is it something that sellers/agents/auction companies are receptive to? What is the best way of going about it? 

I’m conscious that the seller is probably contractually bound in some way to the auction company, although in this case she is paying the 4.2% herself as the buyer pays it as a “reservation deposit” in part payment rather than an additional “reservation fee”. I’m wondering whether, if she is paying this anyway, whether there will be any pushback from the agents.

Any advice/experiences gratefully received.

SDLT_Geek

There are quite a few threads on here about the perils of the Modern Method of Auction including this one: https://forums.moneysavingexpert.com/discussion/comment/80701716

@RHemmings bought a property by private treaty when it was up for sale by MMoA and might answer you.

propertyrental

Buy the Land Registry title and if it does not sell, contact the owner?

eddddy

r_t_ said:

Is it something that sellers/agents/auction companies are receptive to? 

Almost certainly not. You will have to push them - possibly very hard. And they will try to push you back.

The auction company would much rather that you pay their £6k+ reservation fee up front



Essentially you'll be saying something like this to the auction company (lets assume your budget is £150k)....

"The property is unsold - clearly nobody is going to pay you a £6k reservation fee, so you will get no fees.
So I will offer you a lifeline..."

Either say (as @RHemmings did)...

• "I will offer £144k, and pay you your £6k fee on completion (and only if completion happens)"

Or say

• "I will offer £150k, but I wont pay any fees to you (so the seller has to pay the auctioneers fee of £6k out of the £150k, on completion)"

And clarify, "My offer is subject to contract. It is not subject to any of the auction terms and conditions."


The auctioneers first answer will almost certainly be "No" - so you'll need to keep pushing.

RHemmings

@r_t_ you look to be reasoning very similar to how I did. 

How I put my offer to the estate agent was more like "My offer is £X plus the fees of £Y, so a total of £Z."  My offer of £X was the starting bid. So, a lot less than 20% more. However, what is reasonable depends on the starting bid. There are some houses I've seen on MMoA where I'm sure the vendor would never accept the starting bid. In my case, the next door neighbours had told me what the owners were prepared to accept, so I had that extra info. £X was exactly what the neighbours told me that they would accept. 

The local EA and the online auction house both tried to get me to go with MMoA, offering me modifications, rather than private treaty. This continued until I suggested me pulling out if they didn't want to sell by private treaty. They immediately changed the topic. 

I'm in Bali, and during a dry spell. Hence, I must admit that I would rather be out in the sun rather than on forums. But, I'm happy to share my experience. In more detail if by PM than if publicly in the group. 

RHemmings

Just curious if @r_t_ has progressed this in any way...