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BillyShears

Hips And Auctions

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One of the problems of buying property at auction is that you generally haven't had time to have a survey done on the property. Or, if you have, you've sunk money into the property but have no idea whether you will buy it or not. Having surveys done on

I presume that properties going up for auction will have a HIP. Won't this mean that it'll be easier to buy at auction? If that's the case, then won't auctions become more popular? It would work both from the seller's and buyer's viewpoint. The buyer knows more about the property, and the seller gets a quick answer as to whether they'll get their asking (or desired) price without having to renew the HIP month after month.

Billy Shears

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Guest Guy_Montag

One of the problems of buying property at auction is that you generally haven't had time to have a survey done on the property. Or, if you have, you've sunk money into the property but have no idea whether you will buy it or not. Having surveys done on

I presume that properties going up for auction will have a HIP. Won't this mean that it'll be easier to buy at auction? If that's the case, then won't auctions become more popular? It would work both from the seller's and buyer's viewpoint. The buyer knows more about the property, and the seller gets a quick answer as to whether they'll get their asking (or desired) price without having to renew the HIP month after month.

Billy Shears

It's a good point, one thing that crosses my mind is that people will not have invested anything into the properties they are bidding for, so will be less likely to get into bidding wars. I imagine top prices would go down, while bottom prices would go up (more people bidding).

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yeah thats a good point. It'll give all the info they never have on these auction progs on telly.

Will presumable mean rubbishy houses will get rubbishy money.

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Firstly I haven't heard anything that says Auction properties should have a HIP, but I haven't heard anything that says they shouldn't either.

But I think the answer to your question BS is that it's up to lenders. If they accept the information in HIP's, then buyers will buy more at auction. If the lenders won't, then nothing has changed.

Auctions are very popular in Australia, but that's because lenders accept the info provided prior to the auction.

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It's a good point, one thing that crosses my mind is that people will not have invested anything into the properties they are bidding for, so will be less likely to get into bidding wars. I imagine top prices would go down, while bottom prices would go up (more people bidding).

When you say that "top prices would go down, while bottom prices would go up" do you mean overall, so that expensive properties would go down while cheaper properties would go up, or do you mean prices for like-for-like properties?

I wouldn't like to be bidding for a property if I'd already invested a grand or so in it. Many "scams" are based on getting the "mark" to invest a small amount of money, and then get them to spend more money chasing the original small stake.

Billy Shears

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One of the problems of buying property at auction is that you generally haven't had time to have a survey done on the property. Or, if you have, you've sunk money into the property but have no idea whether you will buy it or not. Having surveys done on

I presume that properties going up for auction will have a HIP. Won't this mean that it'll be easier to buy at auction? If that's the case, then won't auctions become more popular? It would work both from the seller's and buyer's viewpoint. The buyer knows more about the property, and the seller gets a quick answer as to whether they'll get their asking (or desired) price without having to renew the HIP month after month.

Billy Shears

Yes- Auction properties will still have to have a HIP. It's a very interesting point you've bought up - Probably another reason EA's a so against it.

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Firstly I haven't heard anything that says Auction properties should have a HIP, but I haven't heard anything that says they shouldn't either.

But I think the answer to your question BS is that it's up to lenders. If they accept the information in HIP's, then buyers will buy more at auction. If the lenders won't, then nothing has changed.

I disagree that nothing will change if lenders to not accept the information in HIPs. Even if lenders do not accept the HIPs, things may change if buyers themselves are prepared to take at least some of the information in HIPs seriously. They will then be more prepared to bid without having invested in a survey themselves. They can then get a survey to satisfy the lender after a successful bid.

Billy Shears

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Guest Guy_Montag

When you say that "top prices would go down, while bottom prices would go up" do you mean overall, so that expensive properties would go down while cheaper properties would go up, or do you mean prices for like-for-like properties?

I wouldn't like to be bidding for a property if I'd already invested a grand or so in it. Many "scams" are based on getting the "mark" to invest a small amount of money, and then get them to spend more money chasing the original small stake.

Billy Shears

I was thinking like for like. If I was interested in an auction property, I would get a survey done, that's £500 (or whatever) that I have invested in the property, that means I want I'll pay more just so I don't "lose" the £500. It makes no financial sense, but it's natural.

However, I think auctions will become more popular, so more people bidding means that (well in the case of my local auction) more houses will be sold, but I think generally with more people bidding more money will be spent.

This of course is superimposed on whatever local & national trends are happening.

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I was thinking like for like. If I was interested in an auction property, I would get a survey done, that's £500 (or whatever) that I have invested in the property, that means I want I'll pay more just so I don't "lose" the £500. It makes no financial sense, but it's natural.

However, I think auctions will become more popular, so more people bidding means that (well in the case of my local auction) more houses will be sold, but I think generally with more people bidding more money will be spent.

This of course is superimposed on whatever local & national trends are happening.

An over-simple way of looking at it would be that more buyers would mean more competition and hence higher prices at auction. But with HIPs making a quick sale more important, and also with the normal pull of more buyers attracting more sellers, things could go either way.

But as you say, any effects from the factors considered here would probably be small compared to overall trends.

Billy Shears

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I disagree that nothing will change if lenders to not accept the information in HIPs. Even if lenders do not accept the HIPs, things may change if buyers themselves are prepared to take at least some of the information in HIPs seriously. They will then be more prepared to bid without having invested in a survey themselves. They can then get a survey to satisfy the lender after a successful bid.

Billy Shears

Fair point, but you're ignoring the huge impact that mortgage lending has on the market. I'll agree it's incorrect to say that nothing will change, but if lenders won't come to the party, it'll be a small party.

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Fair point, but you're ignoring the huge impact that mortgage lending has on the market. I'll agree it's incorrect to say that nothing will change, but if lenders won't come to the party, it'll be a small party.

Isn't this a red herring? Most people who buy at auction either have funds in place or know they can get them. What HIPs will mean is that any property at auction will have a Home Condition Report that most people will rely on. The issue with lenders and HIPs is not about whether they accept the Home Condition Report but about the fact that most lenders will require their own valuation before agreeing to a mortgage.

So, nothing new there.

Auctions are great for vendors. You let a house go to rack and ruin for 30 or 40 years. You flog it in an auction and get the same amount of money for it as you would if you had spent 40k renovating it.

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Fair point, but you're ignoring the huge impact that mortgage lending has on the market. I'll agree it's incorrect to say that nothing will change, but if lenders won't come to the party, it'll be a small party.

I wouldn't claim that the majority of houses would start selling by auction, but that the numbers might increase. If they start to increase, then more buyers would arrive too, bringing in more sellers. Then new "ways of doing things" might arrive too if the market was more worth the interest of businesses associated with property. I've just thought of something that I'm (perhaps rather pretentiously) going to post in another thread.

Billy Shears

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Basically what you lot are saying anyway is that HIP's on auction properties will increase the sale prices at auction by attracting more people to the auction.

I can't disagree with that.

But what's the story on whether HIP's are required at auction?

When you buy a car at auction, you take it as it is, usually no MOT, no tax, no history & sometimes even no ownership papers.

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Basically what you lot are saying anyway is that HIP's on auction properties will increase the sale prices at auction by attracting more people to the auction.

I can't disagree with that.

Why do you have an apostrophe in "HIP's"?

I'm not sure that prices at auction will increase, as if they become a more efficient selling medium more buyers will arrive, but that will lead to more sellers considering auctions as well. I did actually say that in a previous post. But I'm more interested in would happen to prices overall. If auction prices increased, then more buyers would be attracted to them. What happens to average prices across the board would depend on how much auction prices increased (assuming that the net change is auctions becoming more of a sellers market) versus how much larger a proportion of houses were sold at auction (assuming that auction prices would still be lower than general sale prices, e.g. sellers being prepared to accept less for a quick painless sale). Though as has been pointed out in this thread, it's likely that any small effects on price due to auction sales becoming smoother will be swamped by other factors such as affordability and sentiment.

But what's the story on whether HIP's are required at auction?

When you buy a car at auction, you take it as it is, usually no MOT, no tax, no history & sometimes even no ownership papers.

Someone quoted chapter and verse above. But I suppose you didn't get to where you are today (>5000 posts) by reading and thinking about the threads you're responding to :)

Billy Shears

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  • 338 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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