Buying failed mortgage property by private treaty

Myci85

Interested to hear if anyone has bought a property by private treaty after it failed to sell at auction? Were there any issues? Did you get it for a good price - more or less than auction guide price?

Have seen a property that I previously dismissed as it was being sold at auction is now showing as private treaty sale. Auction date was 27th March so assuming it failed to sell for some reason. Guide price was £300k at auction, it has now been reduced to £295k guide price. 

Wondering if it's a red flag that it didn't sell at auction, or if there's potential to get it at a lower price (obviously after satisfying myself there are no huge issues with the property) as guessing many people choose to sell at auction as they want to sell quickly?

user1977

What due diligence have you done so far? It's possible there's something "wrong" with it (which can itself be a reason for trying to sell at auction!), or possibly it just didn't sell for the usual reasons (price too ambitious, slow market for it, etc).

Myci85

user1977 said:

What due diligence have you done so far? It's possible there's something "wrong" with it (which can itself be a reason for trying to sell at auction!), or possibly it just didn't sell for the usual reasons (price too ambitious, slow market for it, etc).

None so far as have only seen today that it's still for sale. But of course would be going in eyes wide open, as would always question that an auction property may well have something very wrong with it, just be interested to hear from anyone who's bought in this way. 

eddddy

Was the property being auctioned through what's called "The Modern Method of Auction"?

If so, that might simply be because an aggressive estate agent who wanted extra fees, so persuaded a naïve seller that an auction was a good idea.

There might be nothing wrong with the house.


But if the property was being auctioned through a conventional 'unconditional' auction, it's a bit unusual. Typically, those auctions are a last resort for problem properties which wouldn't sell any other way. (But I guess you might find an exception.)

user1977

eddddy said:

But if the property was being auctioned through a conventional 'unconditional' auction, it's a bit unusual. Typically, those auctions are a last resort for problem properties which wouldn't sell any other way. (But I guess you might find an exception.)

I quite often see properties still available after (traditional) auction. As above, either too high a reserve price for the punters to stomach, or not enough people who actually want to buy.

Myci85

eddddy said:

Was the property being auctioned through what's called "The Modern Method of Auction"?

If so, that might simply be because an aggressive estate agent who wanted extra fees, so persuaded a naïve seller that an auction was a good idea.

There might be nothing wrong with the house.


But if the property was being auctioned through a conventional 'unconditional' auction, it's a bit unusual. Typically, those auctions are a last resort for problem properties which wouldn't sell any other way. (But I guess you might find an exception.)

No it was traditional auction method. 

Albermarle

Is the title of the thread incorrect/ a mistake ?

Buying failed mortgage property by private treaty

gwynlas

It might have been priced high for that particular auction so there would be insufficient profit for a developer to make a good return. You must be able to see comparables in the area so if it is worth it to you you could still go in with a lower offer as they will not nneed to pay fees.

propertyrental

As with any purchase, decide what you think the property is worth and do your due diligence. Have you even downloaded the LR Title yet? £6 with the Plan and that's an easy step one.

View and look for obvious structural issues, then make your offer.

Zoe02

You need to read the terms and condition or get a solicitor to read it for you as some terms might have made it come back on the market. Some are back to back sale for example, various techniques used. Due diligence is essential. 

pjs493

It could be a red flag. There’s a property I was looking at that’s up for auction. I asked the agent why it’s being auctioned and they were a bit cagey and said something along the lines of ‘people decide to sell at auction for a variety of reasons’. 

Having dug a little deeper into the property it was bought by the current vendor just two years ago. It was listed about a year ago for a high price compared to what they paid. It’s been reduced a few times and now set to go to auction with the starting bid not much more than what they paid for it. 

Looking at the photos it looks like it’s had new bathrooms and a new kitchen and is neutrally decorated throughout and sparsely furnished. I get the impression someone bought it to flip it and can’t sell it for what they wanted. Now they’re just desperate to get rid of it so they don’t lose anymore money on it. 

Frustratingly, it’s a lovely period property but they’ve given it a really modern finish inside that just doesn’t fit with a 300 year old house. The kitchen isn’t to my taste and neither are the bathrooms. I suspect a lot of people have looked at it and decided the same thing; that the modern/fashionable kitchen and bathroom aren’t fitting or in keeping with the age of the property. I wouldn’t want to buy a house with a brand new kitchen and just want to rip it out because I don’t like it. It’s a lot of money to spend that I don’t mind spending if I buy somewhere with a 30 year old kitchen. 

On the other hand though, it could just be that the vendor wants a quick sale for another reason. It could be a couple going through a divorce who just want to draw a line under things. 

Or it could be a similar situation to my parents - they bought a new build house and just wanted rid of the old one so they didn’t have to own two properties for an extended period of time while waiting for the old house to sell. There was nothing wrong with it, they just wanted a quick sale.