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Buying At Auction

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Hi Guys,

I am thinking of buying a house at auction. The guide price is well within

my budget but I will still need to get a mortgage.

The property is currently let on an Assured Periodic Tenancy. Can anyone

clarify what this means. This is what I have been told: Basically it is

the implied contract that the tenant is under onced the shorthold tenancy

has expired. The tenant has not yet signed a new contract and hence is

still under the terms of the old one. Since the shorthold has expired -

there is no end date for the tenant - i.e. he/she can stay as long as they

like. However since it is under a form of tenancy they are paying the rent

and are abiding by the terms of the old shorthold tenant. In order to get

rid of them (if they go by verbal notice) you have to start legal proceedings.

Is this right ?

What are the potential pitfalls of this kind of arrangements aside from the

likly hood that the tenant will not leave peacefully when I want him to.

Should I steer well clear of this.

Second point

This concerns funding the purchase. The auctioneers have said that it will

be difficult to get a survey arranged at short notice as the auction is very

close and what with the house occupied I would need to give written notice,

but I cant see any bank backing me with this - is this normal when buying

from auction. I could get a persoal loan, and then once (or if I get the

house) get bank to take on the loan. The auctioneers do not advise buying

without a survey, however he did mention that since the house is occupied it will be in a habitable condition ( yes I know there can be many other

problems not clearly visible).

My initial thoughts are to forget about it - the only benefits really are

that it is let out and so I shall be getting income immedialtely.

Any one else bought from auction - is this the way things are done.

Any advise would be appreciated


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Ok here`s some good advice particularly relevant to the ftb


Here`s some other good advice, (ignore this at your peril) from the horses mouth ,so to speak.

"Any property at auction needs to be looked at carefully as there is always a reason why it's in there. Builders look at most and scrutinise them, so you will be up against them.

Choose a few you think are worth considering, look at them, go to the auction but don't bid.

If they go, so be it.

If they don't, come to me at the front immutably and I will tell you the reserve and anything I know about the place. I can do that after it has been offered, but not before.

Regulated tenancies are a specialist area. The tenants are there for life and could pass the tenancy on to a near relative that lives there. Very few represent good return, unless you buy a number and averages determine that 10% become vacant each year releasing a property to go open market value. Traditionally regulated tenancies only achieved 75% or so of market value, but recently they have been achieving vacant value."

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