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  • FIRST POST
    • Enm1
    • By Enm1 19th Oct 19, 9:14 PM
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    Enm1
    Help please - what to set as limit at auction?
    • #1
    • 19th Oct 19, 9:14 PM
    Help please - what to set as limit at auction? 19th Oct 19 at 9:14 PM
    We would value the opinion of the experienced posters on our dilemma...

    We want to buy a studio flat in a specific complex due to location/safety/cost and there are 2 on the market. One is for sale by a traditional Estate Agent for 280000 (Rightmove property 73388560) and the other up for auction with a guide of 200000 (Rightmove property 85454363). We've seen both and they both will need updating and redecoration.

    What should our limit be on auction day? We're thinking the reserve price is about 220000 (10% above the guide) and would love to get it for the reserve to allow more cash for refurbishment. Two other similar studios in the same complex are currently under offer / sold according to Rightmove and the last sale was for 275000 in January.

    We are able to buy without mortgage and have attended an auction to see how the process works and know we will have to complete within 4 weeks of the auction etc.

    Any thoughts on our plan? We're a bit concerned about Brexit and the housing market but want to buy the flat for our daughter who just started at University in London and will need to move out of her halls of residence next summer, so we could delay the purchase until the New Year?


    PS sorry can't post links as I've just signed up having been a MSE observer for many years
    Last edited by Enm1; 19-10-2019 at 10:06 PM. Reason: removing our upper limit price as advised
Page 2
    • Enm1
    • By Enm1 20th Oct 19, 4:07 PM
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    Enm1
    The first one says under offer in the details. What worries me more though is that they are near London South Bank University which is a really terrible university. It is one of the 11 or so duds in London that could do with being closed. If your daughter is at South Bank then buying a flat for her to live in is a really bad idea because she is going to need practice at paying rent in London because of the likely job situation after a degree from somewhere like South Bank University.



    If she isn't studying there then she would be better off living nearer to the university she is studying at so that she gets to see her friends and isn't stuck in a flat somewhere on her own.
    Originally posted by Cakeguts

    Thanks Cakeguts - she will be going between Guys (London Bridge) and Kings (Camberwell) hospitals for her studies for the next 5/6 years. I understand a number of students on the same course also live in the same block as it has a 24hr reception so is perceived as 'safer' than other blocks as well as being perfect for travelling.
    • Skiddaw1
    • By Skiddaw1 20th Oct 19, 4:08 PM
    • 414 Posts
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    Skiddaw1
    ...And to be fair, unless you've gone for a vocational degree, I suspect there's few graduates who haven't spent some years after graduation in low-paid, low-skilled work regardless of what university they attended. I know I did. Indeed, my eventual career path was a bit of an accident and having a degree really didn't make any difference.



    Anyway, all a bit off-topic really.
    • Enm1
    • By Enm1 20th Oct 19, 4:12 PM
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    Enm1
    Whichever of the two flats you go for check out the service charge and any upcoming repairs as the block looks like a potential money pit.
    Originally posted by Tom99

    Thanks Tom99 - fortunately the service charge is reasonable but clearly only ever going to rise. We think its worth it for the security of a 24hr manned reception and access to a gym as well as parking. Unfortunately service charges seem ubiquitous on Central London flats .
    • Enm1
    • By Enm1 20th Oct 19, 4:18 PM
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    Enm1
    And funding for any major repairs by the freeholder (big enough sink fund etc). There is usually a reason why properties are offered at auction. Look for these reasons.
    Originally posted by deannatrois
    Thanks deannatrois - The block appears to be run by the leaseholders after a RTM takeover a few years ago (previously Peverel ran it and I've read they've had problems in a lot of the developments they run). There is a sink fund but not sure how big it is but at least replacing ignitable building cladding isn't an issue for this complex.

    I believe the auction property needs a quick sale as the owners are going abroad.
    • Enm1
    • By Enm1 20th Oct 19, 4:28 PM
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    Enm1
    If the auction house will allow it, entering a proxy (or postal) bid would save getting caught up in a bidding frenzy.
    Originally posted by FreeBear

    Thanks FreeBear - I'll try going to another auction or two before the big day and if I feel too uncomfortable we'll consider a proxy bid.
    Presumably the auctioneer will take the price up to our maximum bid if they know what we're prepared to pay? I'm guessing you may get a better deal if bidding in person?
    • Enm1
    • By Enm1 20th Oct 19, 4:32 PM
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    Enm1
    First one says under offer
    Originally posted by getmore4less

    Thanks getmore4less - That's odd as I can't see it under offer on Rightmove or the Estate Agents website? I'll check with the EA tomorrow as that would really complicate things
    • eddddy
    • By eddddy 20th Oct 19, 4:56 PM
    • 8,757 Posts
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    eddddy
    Just need to be disciplined on the auction day and not get carried away as we attend an auction recently and there was quite a frenzy and everyone could feel the tension in the room for some properties.
    Originally posted by Enm1
    If there's a frenzy, don't get involved. Wait until the frenzy has finished before bidding.


    If there's a frenzy, it tends to be because of illogical bidders.

    For example,
    • 3 or 4 bidders have a limit of around 250k for a property
    • Bidding is moving up towards 250k
    • Illogically, those 3 or 4 bidders all want to get a bid in before it reaches 250k
    • (I guess they just want the buzz of telling people that they made a bid at a property auction.)
    • The property eventually sells for 280k

    It's far more sensible to wait until bidding has calmed down at about 270k before bidding (assuming that's still within your limit).
    • Enm1
    • By Enm1 20th Oct 19, 5:32 PM
    • 15 Posts
    • 6 Thanks
    Enm1
    If there's a frenzy, don't get involved. Wait until the frenzy has finished before bidding.


    If there's a frenzy, it tends to be because of illogical bidders.

    For example,
    • 3 or 4 bidders have a limit of around 250k for a property
    • Bidding is moving up towards 250k
    • Illogically, those 3 or 4 bidders all want to get a bid in before it reaches 250k
    • (I guess they just want the buzz of telling people that they made a bid at a property auction.)
    • The property eventually sells for 280k

    It's far more sensible to wait until bidding has calmed down at about 270k before bidding (assuming that's still within your limit).
    Originally posted by eddddy

    Thanks eddddy - great advice We'll set our max price and we're not desperate for this flat as there'll be others even in this one complex (currently 4 studios on Rightmove)
    • Cakeguts
    • By Cakeguts 20th Oct 19, 7:58 PM
    • 6,889 Posts
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    Cakeguts
    I've not dug into the underlying figures but the article does state:

    "LSBU wins this award, having jumped into the top four for graduate prospects nationally, with nearly 89 per cent of graduates in professional graduate-level jobs or further study six months after graduation."

    "Median LSBU graduate salaries start at 26,000, which is among the highest in the country."

    I suspect they've not standardized this data by type of entrant (mature, postgraduate, international) but the fact is while it's not somewhere the most academically able might choose, it does offer a high proportion of vocational courses which will improve the prospects of those undertaking the course. This is what is likely being reflected in the stats.

    Not everyone can get 3 or 4 good A-levels, but it doesn't mean there shouldn't be opportunities for them to continue education and gain skills valued by employers.
    Originally posted by kinger101

    Yes I know it is off topic but you have really got to read what these things say. What it actually says is that probably 10 students got 26k or over. 10 got under 26k and the rest have stayed in education in the hope that they can turn their useless degrees into something that pays a bit more than national minimum wage.



    There are only about 30 universities that give value for the money spent on the degree the others would all be better off as technical colleges offering free education to local people especially in London.



    You don't have to go to university to gain skills valued by employers. That is exactly what technical colleges were for. The only diffence being that they are now called universities and can charge 9000 per year for the benefit of an old technical college education that used to be free. There are around 11 universities like this in London that used to be technical colleges. The technical colleges were run for the benefit of local people to give them skills to help them get a job. The backwards step was allowing them to turn into universities and charge students for these courses. Which are around the same level of difficulty as the free technical college courses.



    You can see how these universities attract gullible students. 26k for most of the country would be a good salary but in London it wouldn't pay the rent on a one bed flat and leave much over.



    Generally speaking the universities that have to advertise how many people get jobs or are in education 6 months later are the ones that students try to avoid going to because they know that they are not good value for money. I wouldn't expect the top universities to advertise how many people get jobs and what they are paid for them because they don't have any trouble attracting students. You can tell which universities are not worth paying to go to by their advertising if you read what it says carefully enough.



    The student in this case is fortunately not attending this university which is a really good thing but I am still not convinced that buying a property for them to live in is worth it unless they are studying medicine which is a very long and expensive course. It probably wouldn't be worth it for a nursing degree because of the cost of selling a studio after the course has finished. It could be easy to sell but on the other hand it might not be which is why renting makes life easier.
    • FreeBear
    • By FreeBear 20th Oct 19, 10:02 PM
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    • 4,290 Thanks
    FreeBear
    Presumably the auctioneer will take the price up to our maximum bid if they know what we're prepared to pay? I'm guessing you may get a better deal if bidding in person?
    Originally posted by Enm1

    I've been to auctions where proxy bids have been entered (and done a couple myself). You don't get any extra brownie points for bidding in person, nor is there any special deals to be done. What normally happens with proxy bids, is the auctioneer looks at the reserve price then looks to see who has entered bids. If the bids are above the reserve, he picks the highest one and then opens the bidding to the floor at (as an example) 1K above the next highest proxy bid. The auctioneer will then bid on your behalf against the room until either you "win", or the room goes above your limit.
    Her courage will change the world.

    Treasure the moments that you have. Savour them for as long as you can for they will never come back again.
    • Enm1
    • By Enm1 20th Oct 19, 10:56 PM
    • 15 Posts
    • 6 Thanks
    Enm1
    I've been to auctions where proxy bids have been entered (and done a couple myself). You don't get any extra brownie points for bidding in person, nor is there any special deals to be done. What normally happens with proxy bids, is the auctioneer looks at the reserve price then looks to see who has entered bids. If the bids are above the reserve, he picks the highest one and then opens the bidding to the floor at (as an example) 1K above the next highest proxy bid. The auctioneer will then bid on your behalf against the room until either you "win", or the room goes above your limit.
    Originally posted by FreeBear

    Thank you FreeBear - great to hear of some personal auction experience
    • FreeBear
    • By FreeBear 20th Oct 19, 11:21 PM
    • 3,312 Posts
    • 4,290 Thanks
    FreeBear
    great to hear of some personal auction experience
    Originally posted by Enm1

    Should point out that I've not bought a house at auction. Machine tools, vehicles, and art (plus other "stuff"). But regardless of what an auction house is selling, the basics remain the same.
    Her courage will change the world.

    Treasure the moments that you have. Savour them for as long as you can for they will never come back again.
    • zagubov
    • By zagubov 21st Oct 19, 1:06 AM
    • 16,631 Posts
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    zagubov
    Get a friend to tell you you've won it at a specified high price. Immediately gauge your gut feeling .
    If it's Great! or is it Oh ****.
    Try again with a lower price and note your reaction.

    Rinse and repeat.
    There is no honour to be had in not knowing a thing that can be known - Danny Baker
    • getmore4less
    • By getmore4less 21st Oct 19, 7:39 AM
    • 38,016 Posts
    • 23,587 Thanks
    getmore4less
    Thanks getmore4less - That's odd as I can't see it under offer on Rightmove or the Estate Agents website? I'll check with the EA tomorrow as that would really complicate things
    Originally posted by Enm1
    https://www.rightmove.co.uk/property-for-sale/property-73388560.html

    Key features
    7th Floor Apartment
    Secure Parking
    24 Hour Concierge
    Swimming Pool & Sauna
    Residents' Gym
    UNDER OFFER

    2 SSTC
    Last edited by getmore4less; 21-10-2019 at 7:49 AM.
    • Tom99
    • By Tom99 21st Oct 19, 7:50 AM
    • 5,105 Posts
    • 3,585 Thanks
    Tom99
    7th Floor Apartment
    Secure Parking
    24 Hour Concierge
    Swimming Pool & Sauna
    Residents' Gym

    Out of interest what's the annual service charge for that lot?
    • AdrianC
    • By AdrianC 21st Oct 19, 8:13 AM
    • 26,376 Posts
    • 26,277 Thanks
    AdrianC
    Ten grand per square metre.
    • Doozergirl
    • By Doozergirl 21st Oct 19, 9:07 AM
    • 27,898 Posts
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    Doozergirl
    Wow. I take it that Elephant & Castle isn't a total dump anymore? It would have been pretty low on my list of locations to be walking alone 15 years ago, certainly. Although that is still cheap for Central London, I guess. I'm born and bred South London and worked nearby for a good time.

    OP, do have a really close look at what the value of the apartments really is, because if you set your heart arbitrarily at 220k because the guide is low and it goes over because the average price is 275k, then you've missed out on a potentially good deal for the block somewhere in between. I'm not suggesting what is a good price - Zagubov's 'rinse and repeat' idea is pretty good.

    You must do your homework, you must read the auction pack and ensure that there is a managing agent's report in there detailing the reality of what it costs to live there and if there are any specific issues with the apartment. And have a solicitor look over it. Leaseholds are a minefield.
    Everything that is supposed to be in heaven is already here on earth.
    • davidmcn
    • By davidmcn 21st Oct 19, 9:18 AM
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    davidmcn
    Wow. I take it that Elephant & Castle isn't a total dump anymore?
    Originally posted by Doozergirl
    I think those are typical London prices even for places which are total dumps.
    • AdrianC
    • By AdrianC 21st Oct 19, 9:27 AM
    • 26,376 Posts
    • 26,277 Thanks
    AdrianC
    Wow. I take it that Elephant & Castle isn't a total dump anymore?
    Originally posted by Doozergirl
    We've got a good friend who lives just along from there, Burgess Park.

    The heffalump itself is still not exactly Knightsbridge, but the surrounding areas have undergone a massive amount of gentrification - the huge Heygate estate has been flat-packed and replaced with... https://www.elephantpark.co.uk/
    • Doozergirl
    • By Doozergirl 21st Oct 19, 9:48 AM
    • 27,898 Posts
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    Doozergirl
    We've got a good friend who lives just along from there, Burgess Park.

    The heffalump itself is still not exactly Knightsbridge, but the surrounding areas have undergone a massive amount of gentrification - the huge Heygate estate has been flat-packed and replaced with... https://www.elephantpark.co.uk/
    Originally posted by AdrianC
    Ah, outlets reflecting the 'vibrant' local community, providing them with coffee, craft beer and vegan food. The staples of South East London living!

    Has the shopping centre gone yet? It was grim, despite being painted that cheerful shade of bright, peeling pink.
    Everything that is supposed to be in heaven is already here on earth.
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