Auction property

[heeblejeeble]

Hi, complete newbie to buying a house here and the only one my husband and I both really like is an auction. It's guide price is 169,950 and houses in the area sell for about £180,000 and our budget is £200,000. However I'm so confused, if the auction goes beyond 200,000 we obviously can't buy it but if it's then valued at lower than whatever we bid do we not get a mortgage for that amount? It's not even a do-er upper it's in really good condition, well kept and modern. Should we disregard the property as we're aren't cash buyers?
Any help would be massively appreciated :D

If it’s valued lower, then you’ll need to stamp up a higher deposit to have the appropriate LTV. With an auction property, you also need to do all your work beforehand as you only have 2 weeks to complete if you’re successful and the exchange takes place immediately so you can’t pull out.

Thanks so much @JoJoSM2, honestly hours of googling and youve put it clearer than anything I've read 😂 thank you

@heeblejeeble It's not even a do-er upper it's in really good condition, well kept and modern.

I suggest you ask yourself why it is being sold at Auction as this is unusual

You get 20 working days as a minimum, some give 6 or 8 weeks. But yes all prep before hand, very hard to get everything to line up for a mortgage in the 4 weeks for a standard mortgage

Oh wow! I've just looked on a couple of websites and you do get four weeks to complete these days. Used to be two which really discouraged non-investors from bidding at auctions.

Look at the legal pack for the lot. It will die icy the amount of time you have to complete. I’ve bought two houses at auction and one was complete in ten days, the other two weeks. One I had to pay sellers fees.
You have to get the mortgage approval on the property before the auction, as it would be foolhardy to risk not qualifying for the mortgage. You’d loose the deposit if you can’t complete.
The auction house will ask for proof of funds for 10% of the guide price before you can register to bid.
It’s up to you to do due diligence on the property before you bid. Visit it, get your finance sorted, read the legal pack.

Get a mortgage broker who can deal with auction properties asap.

Is this a 'proper' auction or a 'modern method of auction'

Is there a auction date and venue set or is it like an Ebay kind of thing?

Because there are different rules for each kind and the MMOA is a bit of a scam.

With the MMOA, buyers are often out of pocket and have nothing to show for it.

Agreed, if it's the 'modern' one, then it isn't really an auction but a scam.