Purchasing House via Auction(?)

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NVP

NVP

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Howdy,

Has anyone ever purchased a house via auction?

I've seen a decent prospect to purchase, it says:

Starting Bid Price £270,000.00 plus Reservation Fee.

...

The buyer is required to sign a reservation agreement and make payment of a non-refundable Reservation Fee of 4.2% of the purchase price including VAT, subject to a minimum of £6,000.00 including VAT.

How much do auctioned houses usually go above "starting bid"?

Generally I've seen them listed with "guide price" showing an expected range, this one simply has "starting bid".

Also, is the 4.2% reservation fee about average?

It has just come on the market so I was told by the agent they will get back to me, so will ask them the same questions when they do, but just curious if anyone is familiar with House Auctions and if they could provide their opinion.

Thanks :)
 
Have watched Homes under the Hammer for years, there is no way to tell how high auctions will go, though giving the current housing prices I would expect them to go over by a chunk
 
As above, it can lead to figures going well above the guide price. As the market is quite buoyant just now I would suspect it will rise above what they're stating.

The key is to set your limit and be strict in not going over what you can afford. I have seen a few auction places have lots that get withdrawn now whether that's by the seller themselves or if they've been offered a figure prior to the auction I don't know. It might be worthwhile checking the small print to see if that's something you could try if you think the house is for you? Maybe bag a bargain that's acceptable to the seller?
 
I've not bought a house from auction but I am a bit of a Rightmove addict.

The last 3 houses that I followed locally that sold via auction went for roughly ~20% over asking price (£240k, £220k and £180k asking price). These were properties that weren't in a particularly bad state of repair, just very outdated inside and in need of a good refresh.
 
Have watched Homes under the Hammer for years, there is no way to tell how high auctions will go, though giving the current housing prices I would expect them to go over by a chunk
As above, it can lead to figures going well above the guide price. As the market is quite buoyant just now I would suspect it will rise above what they're stating.
Thank you. Yes, this is true and recent volatility makes generalising even harder, however I know it's a vague scenario to predict without all the information either way.

The key is to set your limit and be strict in not going over what you can afford. I have seen a few auction places have lots that get withdrawn now whether that's by the seller themselves or if they've been offered a figure prior to the auction I don't know. It might be worthwhile checking the small print to see if that's something you could try if you think the house is for you? Maybe bag a bargain that's acceptable to the seller?
Yes, definitely won't got beyond the cash I have to play with. I do like the suggestion of attempting a direct offer for a quick sale, I will need to figure out how to wangle some contact with the owner. Thank you.

I've not bought a house from auction but I am a bit of a Rightmove addict.

The last 3 houses that I followed locally that sold via auction went for roughly ~20% over asking price (£240k, £220k and £180k asking price). These were properties that weren't in a particularly bad state of repair, just very outdated inside and in need of a good refresh.
Thank you, this is very helpful. Did you collate this information yourself just from monitoring or is there a way I could obtain stats to help predict this specific area?


Thanks all for the help and advice :)
 
Thank you, this is very helpful. Did you collate this information yourself just from monitoring or is there a way I could obtain stats to help predict this specific area?

I just got a bit addicted to Rightmove during lockdown and followed up on the sold prices when they appeared.

I don't know of any way to tell if a house was sold at auction, unless you had details of the auction listing beforehand, or so it advertised as sold via auction on rightmove.
 
Read the small print, I'm presuming you've got the full legal packs for a couple of auctions and read through them?

Like Dan above, I've been following a lot of auction properties but at my budget it's a non starter really. Reason being, I've found every property in London has some obscurely worded fine print adding about £12k to the costs.

This may be a small figure in your reckoning but the point being - auction terms can literally just add a clause that you have to pay an extra chunk on top of the various other fees and rates. Some I've seen even spell the figure out rather than using numbers, so you can't even see it scanning through the documents.
 
It has just come on the market so I was told by the agent they will get back to me, so will ask them the same questions when they do, but just curious if anyone is familiar with House Auctions and if they could provide their opinion.


Been to several auctions over the last few years.

Be aware, the reservation fee is on top of your bid price, but also is included in stamp duty calculation.

So lets say you won at the guide price thats £11340 in the reservation fee, plus the auctioneer costs on top potentially.

The fee will usually have an attached timescale, meaning if you dont complete by that timescale the seller can re-list the property again....


How much do auctioned houses usually go above "starting bid"?

2 properties I had an eye on, the first auction went for £5k under guide price but the buyer never completed so was re listed 2 months later, and both went 10k over asking last week, went over my max budget by 2k, still kicking myself on those ones.
 
Bought one a load of years ago.
- You need cash to complete in 30 days, you wont get a mortgage finalised in time.
- You have no come back, if the solicitor finds something while exchanging contracts it's tough luck.
- read the legal pack
- Make sure you check it out properly during the visiting times, or bring someone who knows what to look for.

You need to be getting a substantial discount on the same house bought via an estate agent to give up everything above. If you aren't then walk away.
 
Bought one a load of years ago.
- You need cash to complete in 30 days, you wont get a mortgage finalised in time.
- You have no come back, if the solicitor finds something while exchanging contracts it's tough luck.
- read the legal pack
- Make sure you check it out properly during the visiting times, or bring someone who knows what to look for.

You need to be getting a substantial discount on the same house bought via an estate agent to give up everything above. If you aren't then walk away.

This pretty much sums up what I was going to say.

Be very very sure everything stacks up in terms of the price, the ability to move quickly (cash buyers only in reality), and read, read and re-read all the relevant legal pack/auction house information for costs/charges etc.

Been to a few auctions with a friend who is a property renovator etc and you see so many people getting carried away buying houses for WAY in excess of what they should be paying and also WAY in excess of their own budget. My friend saw the same house come back via auction 4 times in a year, as the deals just kept falling through but people are paying the costs each time. Madness.
 
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