Selling tenanted property by auction

glothy

Hi all. I'm desperate to sell my rental property which is a listed leasehold flat. However tenants are currently only 2 months into a 12 month contract and won't allow viewings. Could I sell at auction under these circumstances? Estate agent won't touch it since they can't do viewings.

theartfullodger

What inducements (eg ££__) have you offered tenants to permit viewings.  You realise selling the place does not end tenancy nor compel tenant to leave?

Tenants are quite entitled to decline viewings (or valuation visits etc etc etc....).

Explained you would (if justified) give good refs and be flexible on dates if they do go?

Why did you sign tenancy for 12 months then wish to sell 2 months later please??

Which country (eg WALES, NI...) ?  Laws vary....

ReadySteadyPop

glothy said:

Hi all. I'm desperate to sell my rental property which is a listed leasehold flat. However tenants are currently only 2 months into a 12 month contract and won't allow viewings. Could I sell at auction under these circumstances? Estate agent won't touch it since they can't do viewings.

I think you can, but why the desperate rush to sell if you don`t mind me asking?

eddddy

Yes - you can sell at auction.

But...

• Buyers will bid low on a property which they can't view and have to buy 'blind'

• Buyers might bid low, because the tenants seem 'difficult' - because they won't allow viewings

• Buyers probably won't be able to get a mortgage on the property - so it will be cash buyers only - which tends to mean lower bids

• Buyers tend to bid lower on tenanted properties than they do on vacant properties

So given those reasons, the property might achieve a very low price at auction.

ReadySteadyPop

eddddy said:

Yes - you can sell at auction.

But...

• Buyers will bid low on a property which they can't view and have to buy 'blind'

• Buyers might bid low, because the tenants seem 'difficult' - because they won't allow viewings

• Buyers probably won't be able to get a mortgage on the property - so it will be cash buyers only - which tends to mean lower bids

• Buyers tend to bid lower on tenanted properties than they do on vacant properties

So given those reasons, the property might achieve a very low price at auction.

Not sure there are large numbers of people interested in tenanted, or any, rental property nowadays, what happens if the tenant leaves and you have to pay double council tax?

glothy

eddddy said:

Yes - you can sell at auction.

But...

• Buyers will bid low on a property which they can't view and have to buy 'blind'

• Buyers might bid low, because the tenants seem 'difficult' - because they won't allow viewings

• Buyers probably won't be able to get a mortgage on the property - so it will be cash buyers only - which tends to mean lower bids

• Buyers tend to bid lower on tenanted properties than they do on vacant properties

So given those reasons, the property might achieve a very low price at auction.

Thank you. This is very helpful. Do you have any recommendations for who to list it with? And are there usually fees to pay if it doesn't sell? Will need to raise enough to pay off the current mortgage.

Silvertabby

Have you asked your tenants if they are interested in buying the flat - with a suitable discount for a no-hassle quick sale?

eddddy

glothy said:

And are there usually fees to pay if it doesn't sell?

You'll have to pay a solicitor to produce a legal pack. The costs associated with that are:

• Solicitors fee (a few hundred)
• Leasehold Management pack (maybe £100 to £300)
• Search fees (maybe £250 to £500)

Plus there's likely to be an auction entry fee which might be £300 to £500 (for a conventional 'unconditional' auction).

You might come across 'conditional auctions' - often called the "Modern Method of Auction". They don't usually have entry fees - but the terms for buyers are very bad, so many buyers won't go near them. And they are not suitable for your type of property anyway.


An auction appraiser (from the auction house) should be able to tell you what your property would achieve at auction, and advise on reserve prices etc.


Depending on when the next auction sale dates are (and how quickly searches come back, how quickly your freeholder produces a management pack, etc), it might take 8 to 10 weeks to get to the completion of the sale.

(Or it might take 4 to 6 weeks to fail to sell at auction.)

pinkshoes

I'd look at how much you'd get selling with and without tenants then bribe the tenants to leave.

E.g. worth £200k unoccupied and £120k with tenants, then offer your tenant a cash lump sum of £10k if they end the tenancy and move out in 28 days.

swingaloo

If they only moved in 2 months ago and had a 12 month agreement then they are going to feel annoyed a being asked to ;eave already. There are a lot of costs involved with moving and they may find it difficult to find somewhere else quickly so compensation may be in order to persuade them to leave.

Is this related to the property mentioned in your other thread?

FlorayG

Are your tenants aware you want to sell it with them in situ and not with vacant possession? When I was looking to buy I wanted a tenanted property ( its useful to know that you already have decent tenants) and some of the properties I viewed the EA told me the tenants had refused viewings from anyone other than potential new landlords