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shakenvac

To Bid Or Not To Bid?

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Background.

I STR'ed a long time ago (too long ago 2001 - ouch).

My personal circumstances have changed...I now need to be a in a good primary school area fairly soon. My present landlord is selling up (though he's had no interest to date...so no urgency on our part to move), therefore we're casually looking for somewhere else to rent. Rental asking prices are very high in the good catchment areas we're considering (N London).

Enter the curveball.....A mighty fine house has recently come onto the market that is being sold by court order - it's going to sealed bids. Closing date is tomorrow lunchtime. The house is a complete wreck but of good solid Edwardian stock in a great school catchment area...apparently lots of interest hence going to sealed bids.

Before the decision was made to go to sealed bids, the asking price was £365,000 ...apparently the Estate Agent received 6 offers ranging from £350k-£365k (though I always take this with a little pinch of salt, i can imagine there's been a lot of interest)

Now my take on this is less emotional. A quick check on Nethouse prices shows a house sold 3 doors away this time last year for £392k. The problem of course is that I have no idea what state that was sold in...I'd have to assume reasonable as the price seems to be in line with other streets nearby.

Now I reckon it's going to cost the best part of £50k to put this right (new wiring, central heating, kitchen, bathroom, roof repaired, plastering & decor). Assuming prices have been "flat" over the past year, therefore a rough valuation might look like this ....£392k-£50k...therefore £342k.

I was actually thinking about offering £321k (cos then i wouldn't have to raise a mortgage). I'm obviously renting at the moment & can pay cash...so I'm an ideal buyer...that's gotta be worth something?!!

Anyway, even at this lower amount I'm a little unsure if I even want to bid (for fear of waiting all this time & then having my legs taken out as HPI goes negative!)

Of course with such interest in this property it's extremely unlikely that my bid would win. On the other hand maybe the higher bidders have places to sell OR the mortgage company might baulk at the valuation (& the state of the place)....I'd make for an extremely speedy transaction.

What to do?!!!!

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Let me get this right....

You STRd in 2001...

with £320K to invest (cash)...

(some feat at 2001 prices - you must have sold a palace)

and you did nothing while prices rocketed

from 2001 to 2004 ?

And now you want advice when the market is falling ?

Just so that I have the full picture....

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Of course with such interest in this property it's extremely unlikely that my bid would win.

Who's told you there is loads of interest? Some vested interest no doubt. Who ever it is they are unlikely to say "We haven't had any interest".

Personally I'd stick in a bid of £310,00 and see what happens. Worst case scenario is they say no or some mug bids higher.

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Let me get this right....

You STRd in 2001...

with £320K to invest (cash)...

(some feat at 2001 prices - you must have sold a palace)

and you did nothing while prices rocketed

from 2001 to 2004 ?

And now you want advice when the market is falling ?

Just so that I have the full picture....

If you want the full story...in 1994 I bought a flat in Muswell Hill for £90k (a wreck) I busted my gut doing it up over 6 years & paid down the mortgage - I couldn't believe it when it got valued at £265k in late 2000...it actually sold for £272k!

My cashpile has been earning interest for 5 years...with a little bit of saving I now sit on about £350k.

Yep...I called the market wrong.....I've seen even pikies & sink estates get rich on paper, but there was no way I could (in my mind) risk losing that wad back then - I had to cash it in.

I did nothing with the money cos I wanted zero risk...a 4%-5%pa savings rate suited me fine!!

What I hadn't expected was there to be a global housing boom & every developed country in the world would keep interest rates artificially low - almost giving away free money!

Sure the market is turning, but my circumstances have changed! I've rented for 5 years...& in that time I've seen my cashpile go up £80k...now I need a bit of stability for my kids. What's your point?

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I've seen my cashpile go up £80k...now I need a bit of stability for my kids. What's your point?

"We can't see ourselves buying for a couple of years (unless something dirt cheap presents itself - unlikely!) & are therefore continuing to rent.

Our present landlord is selling up......"

posted 5 Aug

========================

I seem to be confused......

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"We can't see ourselves buying for a couple of years (unless something dirt cheap presents itself - unlikely!) & are therefore continuing to rent.

Our present landlord is selling up......"

posted 5 Aug

========================

I seem to be confused......

What is this....some kind of Private Investigator's training forum?!!!

It's only in the past couple of weeks that I've found out about the house.

What I meant in that statement was I just can't see ourselves walking into an Estate Agent & looking through the standard high priced tat, viewing & making an offer of -5%.

With this particular house being sold by court order (read they want a quick sale) & going to sealed bids (read possibly a small chance to pick up something relatively cheap) my original statement still stands!

Put this into context...in over 5 years this is the *only* time I've even considered making a bid for a house & even then the likliehood is that i'm not going to be the highest bidder by a long mark.

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I would find a place to rent.

you say its expensive to rent in the area you want to live. how much more than where you are now?

seems to me since you STR'd in 2001 you have actually saved from your personal income quite well. 272k to 352k is not all interest accumulating. so you have a bit of spare cash in the monthly wage ..am I correct??

There might be a crash?....a large chance correct?

little chance of prices running away again.

why take a chance? rent!!

use some of your interest and bit more of your disposable income on the the rental property you desire. Im sure your still likely to be growing your net worth on a year by year basis.Just maybe not as fast as before. But at least your not at risk of losing anything.

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Guest Daddy Bear
What is this....some kind of Private Investigator's training forum?!!!

It's only in the past couple of weeks that I've found out about the house.

What I meant in that statement was I just can't see ourselves walking into an Estate Agent & looking through the standard high priced tat, viewing & making an offer of -5%. 

With this particular house being sold by court order (read they want a quick sale) & going to sealed bids (read possibly a small chance to pick up something relatively cheap) my original statement still stands!

Put this into context...in over 5 years this is the *only* time I've even considered making a bid for a house & even then the likliehood is that i'm not going to be the highest bidder by a long mark.

Shakenvac

Sadly it appears to be very hard to get any people to answer a simple question. Should you buy or sit tight?

Well notwithstanding the fact that I have no real idea about loads of other possible extraneous factors in youyr personal situation i'll try and give you an answer.

If you believe the market will crash by a minimum of 20% in the next two years there will be loads of 400K house at 320k in the future - your choice will be so much broader.

Why don't you just leave the money on deposit @ 5% thats 15K a year before tax and find another place to rent. And spend the the time finding the 'perfect' house. Be assured whern the market crashes other opportunities will present themselves

Cash will be king.

I believe you timed the market very well by buying in when you did and making a killing. You are in a fortunate situation where you've insulated yourself from any disastrous consequences.

Do you believe the market will crash.

Will that house (or similar) be cheaper in 2 years time?

Or will it be more expensive? I personally doubt that scenario very much.

DB

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Whatever you do bid low enough that if you win you don't regret winning down the line. Oh and emphasis that you are a cash bidder able to exchange within x days and complete within y days.

Being a sealed bid £50,000 less with a decent completion date may well be better than £50,000 more 6 months down the line.

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Why buy under stress? I'd suggest you use your renting status to secure the school place. As catchment areas change all the time could you not rent very close to the school you want for only 6 months. Then once the place is secure just move back out and rent a cheaper place again. During this time consider buying if the right property comes up at the right price. In this way you are actually at an advantage by renting.

The way I read it, you are considering buying a house because of circumstances and not because it's a house you actually want to buy.

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thanks for the advice ...pressure to have some relative stability & also be in a good catchment area is perhaps clouding my vision ....& I guess my legs are also flagging a bit. (which is ironic bearing in mind there finally appears to be some daylight appearing at this ludicrously long tunnel).

I'll have a sleep on it...the sealed bids don't have to be in until lunchtime tomorrow. If I do bid...it'll be on the *very* low side!!!

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shakenvac, this is the mortgage guy speaking... I've seen houses go to sealed bids when they recieve just 2 offers at the same price.

Usually, it's not the vendors idea, but the Estate Agents. They sell the idea to the vendor, saying something along the lines of 'we've had soooo much interest; so instead of dragging this thing out, let's just get everyone to put in sealed bids and wrap this deal up?' This way they get paid sooner.

This normally pi$$es off the existing interested buyers who think along the lines of... 'what's wrong with good old fashioned auvtion style negotiation? You're trying to pressure me into making a higher offer!?!' And many of them don't even bother to make a bid.

It's not uncommon for 'sealed bids' to attract just one offer. I've seen it happens. In any event, the vendor is not bound to accept the highest offer anyway, so if they don't like the result, they'll just keep showing.

I have a child too, so I can appreciate your dilemma. My advice: make a bid at a level that would be too good to turn down if you got it. Then sit back and wait.

If you're unsuccessful, then carry on renting.

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My advice: make a bid at a level that would be too good to turn down if you got it.

& therein lies the problem! A nearby house sold last year for £392k...the house I'm bidding on needs heaps spent on it....it might only go to one bid. Perhaps, I'll slip in a cheeky sealed bid of £300,001?!

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Is there a guide price, personally I don't think 300,001 would be low enough if it needs that much work doing to it.

edit:need to learn how to spell

Edited by Hairlocks

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Background.

Anyway, even at this lower amount I'm a little unsure if I even want to bid (for fear of waiting all this time & then having my legs taken out as HPI goes negative!)

What to do?!!!!

You're in a very fortunate position if you're able to buy and renovate the house without taking out a mortgage.

If you're interested in buying a long term home, what does it matter if the value drops? you'll still own the house.

If you're more interested in buying an asset that will appreciate in value in the short to medium term, I wouldn't bother as prices appear to be dropping.

It depends on your motivation I guess.

Cheers.

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Property 'to do up' seems to be fetching a premium in many areas and certainly in my part of Yorkshire. Perhaps it's all these TV programmes, too many developers flushwith too much money and desperate for their next development or just folk wanting to build their own character into their home? Maybe a bit of each?

It would also seem that repo's are no longer the bargain they once were - I was interested in one in Peterborough with a guide price of £75,000/85,000 where other identical properties in the same street are being advertised at £108,000. I asked if the vendor (a BS) would accept cash offers prior to auction. Yes, they said but only if it's well over £100,000. I didn't bother! Nor will I bother going to the auction on Friday!

http://www.rightmove.co.uk/viewdetails-731...a_n=13&tr_t=buy

Edited by ILikeBigBoobs

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After a good night's sleep I've decided not to put in a bid...phew a close shave, what was I on?!!!

Not even a joke bid of £100,001? I would be tempted to do that just on the very, very off chance.

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Not even a joke bid of £100,001? I would be tempted to do that just on the very, very off chance.

The FSA now have certain guidlines which 'should' be followed by lenders i.e.

A lender on repossessing a property must market the property for sale as soon as possible and obtain the best price that might reasonably be paid, taking account of market conditions and the continuing increase in the amount owed by the customer. The FSA will allow the lender to strike a balance between the advantages of selling the property quickly and the advantages that may exist from deferring the sale

I don't really think that £100K would be "the best price that might reasonably be paid, taking account of market conditions and the continuing increase in the amount owed by the customer" :)

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I don't really think that £100K would be "the best price that might reasonably be paid, taking account of market conditions and the continuing increase in the amount owed by the customer"  :)

That is if the house is a repossession. If its not and is a court order for other reasons (proceeds of crime asset confiscation being one) the bid may well be acceptable. Simply put you don't know and its often worth trying it on because once in a while I've been right.

Edited by eek

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That is if the house is a repossession. If its not and is a court order for other reasons (proceeds of crime asset confiscation being one) the bid may well be acceptable. Simply put you don't know and its often worth trying it on because once in a while I've been right.

I'm sure there must be some inbuilt regulation within the assets recovery agency to stop the selling of assets for one third of their easily realisable value.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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