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Property Auctions - Worthwhile Or A Load Of Old Flannel?

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Hi

Just booked a seminar at the Homebuyers property show in Excel, London, called (in big shiny dayglo letters) "Why now is such a fantastic time to buy at auction!. All the usual fanfare and smell of greed. However, I've decided its worth a look. Circumstances like lots of others. I'm 45 yo, I rent, have a middle income job, can't afford to buy a shed, no access to social housing, lost my hse when I split up with the missus 3 yrs ago, etc etc.

So have people got any experiences on this side of things? All replies greatly appreciated as I'm not only new to the site, but in a sense new to the whole game.

ps. this is my 1st post having recently discovered the site. I'd just like to say thank god there appears to be some sense in the world. I thought I was on my own thinking that the state of the housing market was one of the greatest crimes of the century. Well, it is, and I'm not!

P

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Its worthwhile if you have the cash or majority of the cash.

Dont try buying something by arranging a mortgage, you could come unstuck.

Thanks for reply. Could you explain the "unstuck" bit? What should I be particularily looking out for? Could have a £45,000 loan from a relative to help me out. Could I not get a mortgage on the surplus, say 70-80.000

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Thanks for reply. Could you explain the "unstuck" bit? What should I be particularily looking out for? Could have a £45,000 loan from a relative to help me out. Could I not get a mortgage on the surplus, say 70-80.000

I'm interested to know the answer to this too. I asked auctioneers, and I asked mortgage lenders... and the best I could find out (about 4 years ago) was that it would probably be easiest for me to make an offer prior to the auction.

Like yourself, I'd expect to have a substantial cash deposit, but I'd need a mortgage to close the deal. The mortgage lenders seemed to think that it was not a problem; the auctioneers were more evasive. If I were buying at auction, I'd want to have a comprehensive survey etc. done anyway - and that would likely get expensive if I had to do all that up-front before a bid is placed. Going the other way, I presume, I'd have to pay a deposit on the day, and if I didn't close, I'd loose my deposit... £10,000? £20,000? £30,000 at stake? Not sure...

I'd be interested to hear any practical anecdotes.

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I'm interested to know the answer to this too. I asked auctioneers, and I asked mortgage lenders... and the best I could find out (about 4 years ago) was that it would probably be easiest for me to make an offer prior to the auction.

Like yourself, I'd expect to have a substantial cash deposit, but I'd need a mortgage to close the deal. The mortgage lenders seemed to think that it was not a problem; the auctioneers were more evasive. If I were buying at auction, I'd want to have a comprehensive survey etc. done anyway - and that would likely get expensive if I had to do all that up-front before a bid is placed. Going the other way, I presume, I'd have to pay a deposit on the day, and if I didn't close, I'd loose my deposit... £10,000? £20,000? £30,000 at stake? Not sure...

I'd be interested to hear any practical anecdotes.

By far the best auction buys are repossessions - these often go for very heavily discounted prices. The problem is that the mortgage companies (vendors) generally insist on 14 day completion dates which makes it virtually impossible to buy if you don't have all the cash. You have to put down 10% deposit and would lose this if the contract was breached. The problem with pre auction offers is that the mortgage companies have higher price expectations (sometimes 20% higher ) pre auction.

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By far the best auction buys are repossessions - these often go for very heavily discounted prices. The problem is that the mortgage companies (vendors) generally insist on 14 day completion dates which makes it virtually impossible to buy if you don't have all the cash. You have to put down 10% deposit and would lose this if the contract was breached. The problem with pre auction offers is that the mortgage companies have higher price expectations (sometimes 20% higher ) pre auction.

That is not my experience,usally they give 28 days. A mortgagee in possession has to be seen to market the property to get the best possible price by restricting the time between exchange and completion to 14 days will reduce demand and therefore they could be accused of not discharging that obligation properly

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That is not my experience,usally they give 28 days. A mortgagee in possession has to be seen to market the property to get the best possible price by restricting the time between exchange and completion to 14 days will reduce demand and therefore they could be accused of not discharging that obligation properly

Check the special conditions on auction websites - exchange on the day and completion 10 business days after

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Thanks for reply. Could you explain the "unstuck" bit? What should I be particularily looking out for? Could have a £45,000 loan from a relative to help me out. Could I not get a mortgage on the surplus, say 70-80.000

Ok if you have some cash then, its a different game.

If you're looking for somthing around the 120K mark then you'll have no trouble paying the 10% deposit on the day you purchase.

Now the hard bit, Basically you have to complete within 28 days and if you fail to complete then you'll lose your 10% deposit. I know most mortgage companies will run at their own pace, they need to do a survey etc, and if the survey shows problem then this will add delays to your mortgage offer.

The alternative is to get auction financing, there are a lot of companies that do this, you can find their adverts in the auction catalogues. Most of them can put financing in place for you within 24 hours, providing you have substantial equity that you are also committing to the purchase (looks like you;ll be putting in approx 30%, this should be satisfactory). This is like a bridging loan with a high rate of interest.

Once you completed, you need to get the mortgage finance sorted asap so that you can pay off the finance company, best to apply for the mortgage as early as you can and if the mortgage comes through, then fine, otherwise fallback to the finance company.

Auction properties are much better value, and you dont have to deal with scumbag estate agents.

I'm also looking for a property in an auction and i will also need funds from a finance company. I nearly bought something a couple of month ago, but was outbid. Remember to stick to your limit - visit an auction just to get the feel for the proceedings.

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Hi

Just booked a seminar at the Homebuyers property show in Excel, London, called (in big shiny dayglo letters) "Why now is such a fantastic time to buy at auction!. All the usual fanfare and smell of greed. However, I've decided its worth a look. Circumstances like lots of others. I'm 45 yo, I rent, have a middle income job, can't afford to buy a shed, no access to social housing, lost my hse when I split up with the missus 3 yrs ago, etc etc.

So have people got any experiences on this side of things? All replies greatly appreciated as I'm not only new to the site, but in a sense new to the whole game.

ps. this is my 1st post having recently discovered the site. I'd just like to say thank god there appears to be some sense in the world. I thought I was on my own thinking that the state of the housing market was one of the greatest crimes of the century. Well, it is, and I'm not!

P

Hmm...seminars: yibble tricky, me unscrabbly - CHOCADOOBY!!!

I take it you`ll be paying for the seminar? Like a Kinder Egg you`ll be in for a surprise, but it`ll be more than a 20p punt. If it`s ANYTHING like Inside Track then say `no-go`. Pay no money upfront and give them a cheque that you know will bounce!

Cannot fault you for wanting to get a property, but PLEASE avoid snake-oil merchants ;)

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Instead of going to a seminar go to a real life property auction.

The Barnard Marcus catalogue for their auction on 13th March has lots of information and ads for auction finance together with properties from around the country.

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Hi

Just booked a seminar at the Homebuyers property show in Excel, London, called (in big shiny dayglo letters) "Why now is such a fantastic time to buy at auction!. All the usual fanfare and smell of greed. However, I've decided its worth a look. Circumstances like lots of others. I'm 45 yo, I rent, have a middle income job, can't afford to buy a shed, no access to social housing, lost my hse when I split up with the missus 3 yrs ago, etc etc.

So have people got any experiences on this side of things? All replies greatly appreciated as I'm not only new to the site, but in a sense new to the whole game.

ps. this is my 1st post having recently discovered the site. I'd just like to say thank god there appears to be some sense in the world. I thought I was on my own thinking that the state of the housing market was one of the greatest crimes of the century. Well, it is, and I'm not!

P

If you are genuinely interested in trying to purchase a property at auction the you would be well advised to look elsewhere than highly publicised 'events' taking place at venues such as Excel. The very nature of ALL things that take place at Excel is about marketing, generating interest, selling 'services' and getting people to buy into something which resembles anything but somewhere to live - in other words all the characteristics of a bubble market where no bubble should exist and they must be trying hard - Excel aint cheap you know, who's going to be picking up the bill?

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Instead of going to a seminar go to a real life property auction.

The Barnard Marcus catalogue for their auction on 13th March has lots of information and ads for auction finance together with properties from around the country.

Really good advice - go to an auction and get a feel for the whole thing. It is useful to thumb through a few of the legal packs to give you an idea of what to look out for when you may buy for real. At Barnard Marcus auctions there are generally some stands with guys from the finance companies (they are in the room where you sign the contracts - handy!). I have bought auction property before so would be happy to give any further advice you need.

Edited by physics34

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  • 293 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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