MSE Blog: Property auctions: can you bag a bargain?

edited 25 September 2013 at 1:03PM in House Buying, Renting & Selling
9 replies 3.9K views
Former_MSE_HelenFormer_MSE_Helen
2.4K Posts
edited 25 September 2013 at 1:03PM in House Buying, Renting & Selling
Hi all, this is a thread to discuss the MSE blog:
Property auctions: can you bag a bargain?
"My heart raced and my palms sweated as I gazed longingly at the man in front of me. Frivolous thoughts of ‘the one’ flitted in and out of my head...

"A first date, you ask? No – my first property auction.
Having had my hopes dashed a number of times this year while looking for a bargain property, after seeing the perfect flat up for auction, I decided to have a go."


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Replies

  • Good article.

    Just amuses me that a dilapidated 2-bedroom council flat for £325,000 is considered a bargain.
  • I guess the time to buy property was a few years ago (2008-2010) especially in London.

    Ahh well next recession will bring many bargains
  • Good article on this subject by Jo Eccles in the Metro newspaper. You can search for it on Google. Article is specific to London though.
  • corbyboycorbyboy Forumite
    1.2K Posts
    Part of the Furniture
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    The idea that the reserve price can be higher than the guide price strikes me as being absurd.
  • Richard_WebsterRichard_Webster Forumite
    7.6K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
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    Agreement in principle for mortgage before auction is NOT enough.

    Lender must have carried out its survey AND your solicitor must have checked the legal pack.

    Property might fail survey or be considerably down-valued.

    Solicitor might find some major issue in the legal pack that a lay person would not have spotted. This is especially likely with flats - why do think they are put in auctions?
    RICHARD WEBSTER

    As a retired conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability for it.
  • maasmaas Forumite
    510 Posts
    Ninth Anniversary 100 Posts I've been Money Tipped!
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    corbyboy wrote: »
    The idea that the reserve price can be higher than the guide price strikes me as being absurd.

    I find this is a common ploy done by one of my local auction houses, and several of their lots dont even meet the reserve because of this.

    My only advice with auctions is I would stay away from Proxy bidding. This is where you fill out a form beforehand entering your maximum bid. Someone (either one of the auction staff or the auctioneer themselves) will do the bidding there and then for you, bidding up to the highest number you have on your form and let you know afterwards how you got on.

    Sounds all good in theory?

    The property in question was ex-council needs full repair etc for £45k-50k guide. The auctioneer announced that he had a proxy bid on it and he would do the proxy himself and started the bidding off at 50k.

    50k - proxy
    51k - bid in room
    52k - proxy
    53k - bid in room same bidder
    54k - proxy
    55k - bid in room same bidder
    56k - proxy
    57k - bid in room same bidder
    58k - proxy
    59k - bid in room same bidder
    60k - proxy

    At this point the auctioneer was asking the bidder in the room if he wanted to go 61k, but the bidder ruled himself out of the bidding "nodded his head".

    "Are you sure you dont want to come back in, its with me now at 60k" etc etc trying to entice a new bid.

    And then with nothing forthcoming, to my amazement the auctioneer said
    "I'll give you a clue, I've not got much more left in the tank!" - what the hell!

    Then of course the bidder came back in at 61k and took out the proxy and got the Lot, knowing that 1 more "k" will get you the property guaranteed.

    Now if you were at the auction in person, or on the phone you wouldn't declare to the world your maximum bid. Not sure if there was some rule broken there but it seemed to me to be a dodgy way to getting a higher price at the auction at the expense of the proxy. The proxy maximum should never have been even mentioned.

    If you can't make it to the auctionhouse I would always go with telephone bidding, although there is the risk of the auctionhouse not being able to get hold of you just before the Lot (signal problems, telephone engaged etc).
  • One simple piece of advice: Don't get emotional - it's only a house.

    I see too many people bidding more than they planned, simply because they lost control of their emotions. For example, last week I was bidding on a house against a couple. The man was doing the bidding. When the price reached their maximum he stopped bidding. Two bids later the woman snatched the bidding card from the man and carried on bidding, much to the audible consternation of the man. After she'd won the auction I happened to speak to the husband, who told me she'd spent the money they had available for the renovation. So, they had a wreck of a house but no money to do the work. I wonder what she's thinking now?
  • having dipped a toe in the water, looking further have found many with short leases,etc even the most promising had a problem - side wall unpainted due to close proximity with a difficult neighbour so always do your research
  • hildosaverhildosaver Forumite
    322 Posts
    Ninth Anniversary 100 Posts Combo Breaker
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    It is a scary business but if you do your research well and stick to your budget you can bag a bargain. Last year I bought a 2 bed end terrace that needed substantial renovation for 28k, knowing that it was in an area eligible for renovation grants I had already confirmed that I could get a grant from the Housing Executive. In the end I got a grant that paid for 50% of the work required, all in I paid 34k for house and renovation. House just been valued at 65k. This is in Northern Ireland where prices have bombed.
    I am insane and have 4 mortgages - total mortgage debt £258k. Target to zero = 10 years! (2030)
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