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heybobby

Buying Before Auction

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Hi,

I've seen a number of auctions that have properties that are sold before auction. I was wondering how do you go about buying a property before it gets to auction?

Thanks

Heybobby

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I've done it before and it's fairly straightforward if you're buying in cash.

If it's in the auction catalogue already then there should be various dates that the property is available to view. If you like what you see then put your offer to the auctioneer. No point giving an offer below the bottom guide price because they will just let it go to auction. You can still do the back and forth negotiation before the auction so no harm in offering the bottom guide or just above but try to give yourself as much time as possible.

If your offer is accepted then you proceed just as you would if you won at auction - 10% deposit, exchange within 4 weeks.

Edited by Chicken

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As is usually pointed out on threads related to auctions, it is worth asking why the property is going to auction and not being sold through the normal channels. There is quite often substantial work needing to be done on the property or an unusual condition that makes it unmortgageable. Always worth checking this out!

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Thanks for all the replies! The property is listed for £200k, so would that be the guide price? In my opinion it could get a lot more than that.

Thanks

Heybobby

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As is usually pointed out on threads related to auctions, it is worth asking why the property is going to auction and not being sold through the normal channels. There is quite often substantial work needing to be done on the property or an unusual condition that makes it unmortgageable. Always worth checking this out!

True most auction properties are un-mortgageable, but this is normally reflected in the guide prices. What happens normally though is bidding is competitive and people end up over paying for many reasons.

There is no harm in making an offer before the auction, but it will need to be in excess of the guide.

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Thanks for all the replies! The property is listed for £200k, so would that be the guide price? In my opinion it could get a lot more than that.

Thanks

Heybobby

200 is the guide price. There will also be a reserve price, which may, or may not, be higher.

tim

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Thanks for all the replies! The property is listed for £200k, so would that be the guide price? In my opinion it could get a lot more than that.

Thanks

Heybobby

Why do you think it's worth a lot more? Have other houses on the street recently sold for 400k? Have you had a look around the outside of the place to see if there's any obvious structural damage?

The guide price will be given by the auction house, although the listing giving a price then £200k does sound like the guide.

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Hi,

Would you be able to find out what the reserve is? Other than keep offering until it's accepted.

It went to auction yesterday and sold for £232k.

Also I know most property developers buy in auctions but wondered how realistic would it be for a home buyer to complete within 4 weeks?

@chicken - I saw a similar property on the street go for around £400k. Even being slightly cautious, I would think you would be able to resell the property for £300k.

Thanks

Heybobby

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You cant find out what the reserve is, before the auction anyway, they will reveal after the auction if the lot doesn't sell, they will put 'available' on it at the reserve.

The reserve is normally the guide, or if there are 2 guides, then the higher of the 2. Cottons in Birmingham state,

The Guide Price Schedule is intended to be a guide price (usually expressed as a

range) indicating the price region expected and may be subject to change at any

time. The Reserve Price which is agreed with the Vendor prior to the auction sale,

will NOT exceed the highest quoted Guide Price. The viewing schedule is correct

at the time of going to press and we cannot be held accountable for any changes

which occur due to a property being withdrawn/sold prior.

This is not always the case, but the reserve will not be far above any stated guide i would have thought, maybe others can say about other auctions.

In regards completing in 4 weeks, no problem if paying with cash. If using a mortgage not so sure, maybe you need to start things moving prior to the auction, but then no guarantee of buying.

Edited by neil324

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Thanks for the responses, this has helped answer a few questions. However it's raised one more, I noticed on the auction lot it said completion within 6 weeks. How flexible are they in these situations? If we are almost there will they wait or do they take the deposit and send it back to the auction?

Thanks

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Thanks for the responses, this has helped answer a few questions. However it's raised one more, I noticed on the auction lot it said completion within 6 weeks. How flexible are they in these situations? If we are almost there will they wait or do they take the deposit and send it back to the auction?

Thanks

depends upon the seller.

Some will give you the extra time (and charge you for doing so), others will say "tough luck"

tim

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