House sold and then put up for auction

[DareDevil223]

Not a problem, just a curious thing and I'd be interested in people's theories . DP recently sold his late mum's house. It was needed a total refurbishment but was a solid, good sized house in a popular SE seaside town.

He sold it to a developer and got a good price for it, sale completed, money in bank and helping to finance our new house together. All good.

What's puzzling us is that we've just seen that it's back on the market to be sold at auction with a guide price considerably below what DP got for it. I've told him not to worry about it but DP is trying to work out why it's straight back on the market and feels a bit odd about it.

Maybe we'll see it on Homes Under the Hammer in a few months

Presumably the developer is in unforeseen financial difficulty.

Maybe the low auction price is to attract bidders and they have a higher reserve on it. They might think that someone else will pay more and therefore make a quick buck without them having to do a lot of work.

Either it needs more work than anticipated or he has overextended his finances and needs to sell ASAP

Maybe the auctioneer is trying to make it more attractive to a wider market with the low guide price. If it's attractive to enough people on auction day it could drive up the price.

Perhaps another property came up that he can make a better margin on, the developer can only do so much work at a time so rather than leaving the less profitable property to sit he is offloading it.

The developer possibly doesn't see much profit if he does it up. If he sells it at a loss he can offset it against his other profits.

Potentially it needs more work than they imagined, there could be something structural or significant in there, that’s just too costly for a developer to fix and still make a profit on.

Selling at auction is generally buyer beware with no proper survey done.

I wouldn’t take much notice of the guide price.

Maybe the developer needs ready cash for a more profitable venture or he is hoping to get a few more thousand for it than he paid and just wants to flip it without doing any work.

Atm auctions are going crazy

Better that then what happened to us.. we sold my late grandmas house back in 2002 for 500k to a developed via sealed bids. He went in and gutted it, that was it.

Market was going crazy at the time and he sold it 6 months later for 900k.

It still makes me feel sick!

Thanks everyone. I said similar things to DP - he knows it's not his problem but I think seeing his childhood home all stripped out and sad-looking has upset him a bit and made him think about his mum.

It's a guide price. House near us went for £500K, the "come and get me" guide price was £375K.

Nothing odd or sinister - he wants his money back and is flipping it. He may have seen a truly golden opportunity and want the cash NOW. It must be upsetting for your husband, but it will be a home for somebody else soon which is so much better than being empty

Big garden? Has the developer portioned up the property. Selling the existing dwelling to recoup costs and then building a house in what was the garden?

The hammer price at auction is often much more than the guide price. I'd agree that the developer is taking a view that their time/energy will get a better margin elsewhere. Or they could be overstretched and think that this is their best option to get some cash back in.