Anyone ever bought a house at auction and how did it work out.

[dizzydo]

We are thinking that this might be the best way of buying a house given the amount we have to spend. Anyone have any experience of this please.

Oooh, I am at the other end and our house is being sold at auction next Tuesday.
From our perspective, we have a reserve price which noone except us and the autioneer knows,so it won't get sold below that. The board went up 3 weeks ago and so far we have had 7 offers! It's not a particularly fantastic house and does need some work but we're sticking with the auction.
Will watch this thread.

oooh MrsMills how exciting. Where is your house?

Up in Newcastle. Actually I spoke to the auctioneer today about it. One of the offers we received was at the reserve price but we didn't accept it on the estate agents advice, i.e. if they are serious buyers they will turn up at the auction. Found out that they were a young couple buying their first home and have always wanted to live on the road our house is on, so I felt bad. Anyway the auctioneer is going to phone them tomorrow and have a chat with them about the auction as he said that a lot of people are scared by them.
His advice will be to put in a sealed bid, so they don't even have to attend and let any nerves get the better of them.
On the actual night, the winning bidder pays £1000. You then have 28 days to exchange then another 28 days to complete. I'm soo nervous about it!

Mrs Mills - Well if you have a reserve price on it that you are happy with you cant really go wrong and if it doesnt reach the reserve you can always go back to the prospective purchasers that made offers beforehand. Sounds like there is a lot of interest you should have no problems.

Just out of interest (hope this is not too nosy) did you put it at auction because it will only appeal to a small minority (i.e. needs updating) or to sell quickly, or do people selling make more from their properties at auction than through an agent, just interested. Hope you dont mind me asking

dizzydo, we looked into it although did not bid at the end. Unless you are a cash buyer or can finance the purchase of the house other than by way of a mortgage on that house (eg by taking the equity out of another property), I don't think there is any way to be able to do a survey in time to get a firm letter of offer from a bank before bidding at the auction. And it would not be wise to bid unless you already got your finance in place due to the short time frames MrsMills described. Would recommend you sit in on a few auctions without bidding just to get a feel for how the bidding process works.

We have just moved to Stockholm and want to sell asap.
I really think this is a much better way of buying/selling houses and is quite common abroad. The costs from our side are on a par with the 'normal' way of selling on the market, but I think it is becoming a more popular way of doing it now, whereas it was seen as a way to get cheaper properties. There's some fantastic houses up at auction on the same night. I think it makes sense and takes away alot of the angst of buying/selling.

Thanks for the advice Blueshoes. Would defintely have a couple of dry runs just to see what things went for on the day. I am having trouble finding much in the area I want. Having said that comparing prices reached at auction (or sold before) with what they were sold at a year or so later there does seem to be big profits to be made. Not that I want to make a profit I just want a nice house or one that will be nice eventually IYSWIM

Ok so it's a good idea to buy at auction but how do you find out about the property? When I have rung up about auction properties most of them (Choices Aqquitions and others) need you to register and pay a sum of approx £200 to find out any more information. This may be ok for developers but I can't afford it atm. Anyone here know how to find out about auction properties for free?

Hi Dizzydo, the price differential could also partly be due to the auction buyer having invested cash in doing up the place for sale quickly. I do think finance is the main barrier for regular buyers like you and I - hence the majority of people who bid at auctions tend to be hardnosed developers who know a lot about pricing the cost of the renovations and often structural improvements as well as have cold hard cash. If the price is v. low for the location, they sometimes take a punt and bid even without viewing the property beforehand. Dh and I just felt lost. But not to put you off

Carmenere, if you are eyeing a particular road/area and see a sign board for an auction go up, just call the auction company for a free catalogue - it will give you the specs for the property, guide price and viewing times. The catalogue will typically be available about 3 weeks before the actual auction, so that does not give you much time to arrange survey/finance etc. Alternatively, if you know auction houses which specialise in properties in your area, just periodically ring them up for their latest catalogues. My area has v. few auction properties. The one property that did come up had loads of people, developers and starry-eyed couples alike, swarming over it.

Good point Carmenere, I have had similar difficulties and wondered if anyone here might come up with the answer of where to look.

Blue shoes totally agree with you. I think the hard nosed developers are really scary but they are looking for a much bigger profit margin over a far shorter term than most "buy to live" novices like us.

Hi Dizzydo, the price differential could also partly be due to the auction buyer having invested cash in doing up the place for sale quickly. I do think finance is the main barrier for regular buyers like you and I - hence the majority of people who bid at auctions tend to be hardnosed developers who know a lot about pricing the cost of the renovations and often structural improvements as well as have cold hard cash. If the price is v. low for the location, they sometimes take a punt and bid even without viewing the property beforehand. Dh and I just felt lost. But not to put you off

If you need a mortgage to finance an auction purchase, the full offer has to be in place before you bid, including a survey. So, you will be looking at paying for a survey on a property you may not actually secure, eg if the bidding goes above the amount of your deposit, and mortgage. If you don't secure the property, you will have paid for a valuation for nothing.

argh, why does my pooter do that double-post thingy?

Milge, so right about the cost of the survey. And you should always do a full structural survey so that could be a thousand quid there. Also, the property could be withdrawn even before the auction (eg seller accepted offer prior to it being sold) - so you might never even get to bid!

Hi Blueshoes, you have obviously gone into this in a lot of detail. How long did you look for?

Well ...., we only looked in relation to 2 houses in our area which came up for auction. The first house, we did not bid because we realised that there was no way we could get the finance in place. Attended the auction anyway just to get a feel. The house did not reach its reserve price and so did not sell. We subsequently made a private offer to the seller - who we knew was quite keen to sell because the house had been on the market for a year and secured it! We are living in that house now. The next house was a huge rundown behemoth that we say the auction board go up for. But we knew by then from the 400K reserve price and the amount of structural work it was likely to need that we were way over our heads. We went for the viewing but did not attend the auction. Sure enough, it sold to a developer for 475K!