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Original poster

Would you try buy the house?

31 replies

littlebird13 · 12/09/2021 19:52

We have found what could potentially be our forever home.
DH and I are 26. Two DC's 4yrs and 4mo.

The home we are in we bought over 4 years ago and is now worth at least 70% more than what we paid. It was a renovation project and they wanted a quick sale so we're lucky to have a very cheap mortgage. We knew when we bought it it wasn't our forever home.

The house we have found literally looks like a haunted house. It needs a lot of work doing. Mainly cosmetic we think. Hasn't been updated in probably 40+ years. But having done the work it could be our dream home.
The one next door is identical and it is really lovely so it's good to be able to see the comparison. However, we know we couldn't afford that one if it ever did come up for sale.
My DH works in construction and has a lot of knowledge so would do most of the work ourselves. We aren't work shy so happy to put the effort in.
It's on the doorstep of a really good school and in a lovely area.

I am unsure because,
The mortgage will be approx 2.5x more than what we pay now. We can afford it but I think im just anxious to take that leap.
As I said, my DH& FIL will be doing majority of the work but that will mean sacrificing a lot of family time for goodness knows how long. As well as giving up our evenings.
It's for sale through online auction which makes the process a lot more complicated and we would risk losing a lot of money if our chain to sell ours fell through.
We aren't exactly unhappy where we are and our home is suitable for us at the moment.
It would mean changing my DC school. She has just started reception so not exactly settled yet but she did go to the nursery there so has a lot of friends already. Having said that, we can't see us being here forever so I guess it would better to move now than in 2 years when she really has settled in.

Part of me is saying, go for it! It could be a wonderful home to raise our children. the other part is saying why rock the boat and make life harder (albeit temporarily) when there's nothing exactly 'wrong' with where we are?

*if anyone has any experience of online auction I'd love to hear it. Luckily FIL is very clued up on this kind of thing so he would help us.

OP posts:
Kite22 · 12/09/2021 23:02

I was 100% thinking "Yes, definitely, go for it" until you got to the bit about on-line auction.
That would then make it a no from me.

Original poster
littlebird13 · 13/09/2021 02:06

@Kite22

I was 100% thinking "Yes, definitely, go for it" until you got to the bit about on-line auction. That would then make it a no from me.
Thank you @Kite22 To be honest that's the main issue for us. I feel like we'd be putting our life savings on the line which is incredibly scary when we have two children to think about. I also think if it wasn't for auction we would put an offer in, in a heart beat which says everything really. Nevermind, there will be another one 😊 Thank you for your reply
OP posts:
SD25 · 13/09/2021 08:26

I find it hard to get past "forever home at 26"!
But otherwise, if you can afford it as you say, go for it. Especially as you're young!

wineymummy · 13/09/2021 08:32

If you buy at auction you need to put down a deposit straight away. If you then can't complete (your house sale falls through or you can't get a mortgage) you will lose your deposit. There was a thread along these lines recently with the OP about to lose a hefty cash deposit because she couldn't get a mortgage. Many properties sold at auction are because they are un-mortgagable. They usually sell to cash buyers. It's a huge risk and not one I would take myself.

Paranoidandroidmarvin · 13/09/2021 08:45

The trouble is with forever homes things come up. Things you didn’t even think would.

I bought my forever home 8 years ago. I’m now about half way through buying and selling again. Due to medical problems I could have foreseen. I cannot tell u how gutted I am.
I wouldn’t risk all that on a forever home. As u never know what is round the corner.

ShingleBeach · 13/09/2021 08:47

If your house isn’t even on the market yet this sounds like a big risk. Especially as the house might not even be mortgageable.

You have no urgency to move at the moment, a do-er upper seems just right for you, but maybe not this one.

ShingleBeach · 13/09/2021 08:48

Keep saving like mad towards your next deposit.

Clymene · 13/09/2021 08:50

Bring blunt, you can't afford it. You need to be ready to go NOW with an online auction and your cash is tied up in your existing home.

There will be another house. You're very young Smile

Roselilly36 · 13/09/2021 08:52

The property will likely go for much more at Auction. Forget the guide price. A few properties have sold at Auction around us, some have gone £20k+, £30k+, £40K+ over guide.

Yes, I agree with PP, I detest the forever home thing, life changes, circumstances change. Forever is completely unrealistic.

We have recently downsized from a beautiful detached 5 bed house, that was a wonderful home for 18 years, our DS’ grew up there. I didn’t dream when we moved in, that I would be diagnosed with Multiple Sclerosis. We now have a 3 bed detached bungalow, which is much more manageable, and will likely be a long term home.

Good luck in your search I hope you find a lovely property for your family.

3WildOnes · 13/09/2021 09:04

It would be insane to buy a property at auction that you need a mortgage for. Fine for cash buyers but as a pp said you run the very high risk of losing your deposit if the house turns out to be un mortgageable.

Original poster
littlebird13 · 13/09/2021 09:12

I do have to agree slightly on the forever home term. I know we are young but we also have 2 children and ideally we don't want to be moving around a lot while our children live at home.
I think our thoughts are that we wouldn't move unless we could see ourselves living there for the next 10-15 years. Obviously we can't predict what will happen in the future but we also can't put our life on hold in case of the unknown happening.
We do have cash, enough for the deposit and fees etc. But obviously would need a mortgage to make up the rest of the value of the house.

Thank you all for your comments. You have definitely made me realise my concerns are valid. My DH feels the same. We just didn't want to pass up the opportunity if it could be the one. But obviously not as the sale method isn't right for us and far too much of a risk.

As pp said, there will be another 😊

OP posts:
senua · 13/09/2021 09:40

I also think if it wasn't for auction we would put an offer in, in a heart beat which says everything really.
There's nothing to stop you putting an offer in. They might be annoyed and refer you to the auction but 'nothing ventured, nothing gained'.
Alternatively, keep an eye on it and see if it does actually sell at the auction - nothing's guaranteed! In that case, be ready and waiting with your speedy offer (subject to survey, of course).

TakeYourFinalPosition · 13/09/2021 09:43

Not with it being an online auction. You need spare capital to cover the reason its being sold at auction - it’s almost always something that’s expensive and makes it unmortgageable.

Some people smash it and end up with a bargain, but you need to be in the position to lose your deposit to take the risk… and you’re not. Most people aren’t.

It might not go for a deal anyway - a few near us have gone for LOADS over their auction starting price recently, because there’s plenty of house flippers or landlords with big teams who are looking to invest more right now.

RitaFires · 13/09/2021 10:09

When I viewed a house that was going for auction they took our names to contact us if it didn't sell. So it might be worth letting the sellers know that you're interested, but in the current market I wouldn't expect much chance of it failing to meet reserve at the auction.

I wouldn't bid on a house in an auction if I was in any way reliant on finance, they usually have some kind of issue that makes them unmortgageable so it's cash only really. With auctions you have to do your due diligence ahead of time so you're out solicitors fees whether you win or not. Also some people get caught up in the thrill of outbidding someone else and overextend themselves, you can't know how popular a lot is going to be until the bidding starts. It could go for considerably more than the guide price.

nemo99 · 13/09/2021 20:46

If you do want to go ahead, speak to your bank about an open ended bridging loan - for the amount you think you can sell your current home for. At present, even though mortgage interest rates are low, it looks as if bridging finance is quite expensive - may 0.75% per month.
So if current home is worth 400k, you'd be looking at about 3000 per month while your current house was unsold. Not nothing - but may be doable, and it may be possible to roll up the interest until it is repaid.

Be aware that open ended bridges are seen as high risk by lenders and interest rates are highly determined by LTV - stay under 60% if you can.

To find out more, use a search engine for: cost of bridging loan in UK

winniedaisy · 13/09/2021 21:43

@nemo99

If you do want to go ahead, speak to your bank about an open ended bridging loan - for the amount you think you can sell your current home for. At present, even though mortgage interest rates are low, it looks as if bridging finance is quite expensive - may 0.75% per month. So if current home is worth 400k, you'd be looking at about 3000 per month while your current house was unsold. Not nothing - but may be doable, and it may be possible to roll up the interest until it is repaid.

Be aware that open ended bridges are seen as high risk by lenders and interest rates are highly determined by LTV - stay under 60% if you can.

To find out more, use a search engine for: cost of bridging loan in UK

Yes we have discussed this! Thank you! It's an option. We have another viewing Saturday (booked prior to this thread) and an appt with a mortgage advisor that could hopefully give us more info on the bridging loan.

My FIL has done all the figures for us with a couple of different scenarios of how we could raise the money. I think the risk is just ensuring we could complete within the 56 days the auction company requires. Although the estate agent reckons there is wriggle room with that, I'm not so sure. As it's down to vendors discretion. If they won't hang on any extent then we lose a lot of money.
It's took 6 months to complete on our current house with no chain either side 😳
This is all also hypothetical as we may not even win the auction. Regardless of guide price, we have a figure we would be willing to pay based on the street prices and the amount of work that needs doing and also what we can afford. We won't be going above that.

Ugh, stressful.

Geneticsbunny · 14/09/2021 07:54

We bought a wreck at auction and moved in with young kids. the main issue is that you need to be able to buy the house with cash from the auction house. You can then move in, do it up to the point where it is mortgageable ( needs a working kitchen and bathroom but they don't have to be fancy just a kitchen unit with a sink plumbed in and a bath and toilet will do). Then you can get an interest only mortgage which will give you extra spare money to spend on renovations and you can you back to paying off the mortgage once you have finished fixing stuff. The main issue is getting the cash to but the property. We did it by temporarily borrowing money from our parents who remortgaged their houses for about 6 months while we sorted it.

wineymummy · 14/09/2021 11:28

I don't think it's a bad thing to use the term 'forever' house. It's a mindset, not a fact. We have bought what I consider to be our 'forever' house - yes we might downsize when we retire, or we might move if circumstances change, but in the mean time we are spending the extra bit of money to make alterations, add a new kitchen, save for a new bathroom etc, with a view to it being what we want long term. As opposed to our last house which we knew was a 5-10 year house, so every decision had to make financial sense.

winniedaisy · 14/09/2021 12:29

@Geneticsbunny

We bought a wreck at auction and moved in with young kids. the main issue is that you need to be able to buy the house with cash from the auction house. You can then move in, do it up to the point where it is mortgageable ( needs a working kitchen and bathroom but they don't have to be fancy just a kitchen unit with a sink plumbed in and a bath and toilet will do). Then you can get an interest only mortgage which will give you extra spare money to spend on renovations and you can you back to paying off the mortgage once you have finished fixing stuff. The main issue is getting the cash to but the property. We did it by temporarily borrowing money from our parents who remortgaged their houses for about 6 months while we sorted it.
It has a usable kitchen/bathroom thankfully so we are pretty sure its mortgageable. We also could borrow from family if needs be. Which we think could be the better option as then we could stay in our current house a little longer. How did you find doing it with two kids? My oldest was 8 months when we did this one but it only took us 4 weeks as we didn't need to live here.
aLittleL1fe · 14/09/2021 12:35

I'd try to get in touch with the buyer directly to let them know you'd be interested to buy this house using a traditional method, not an online auction. With the online auction, no I don't think it's worth it, in your circumstances. But you can keep looking for similar opportunities in the future. Doer-upper is a good option for people who can do some of the work themselves.

aLittleL1fe · 14/09/2021 12:36

Also, keep an eye on this one too. It may not sell at online auction and may still come back on the market.

winniedaisy · 14/09/2021 13:21

@aLittleL1fe

I'd try to get in touch with the buyer directly to let them know you'd be interested to buy this house using a traditional method, not an online auction. With the online auction, no I don't think it's worth it, in your circumstances. But you can keep looking for similar opportunities in the future. Doer-upper is a good option for people who can do some of the work themselves.
Thank you! We are going to tell the agent to take our details just incase the auction doesn't happen for whatever reason. The vendors name is on the auction pack but I didn't know if it was a bit cheeky to try contact her. I'll mention it to my DH.
RitaFires · 14/09/2021 13:22

There's a lot of reasons a house could be unmortgageable so it's best to get a solicitor to confirm that everything is ok with the title etc before you get your heart set on it. I viewed one house where the septic tank was actually on the neighbour's land and I've heard of issues with boundary disputes and problems with access.

I bought my own house at online auction and was able to download the legal documents and send to my solicitor before I decided if I was going to bid, there was a strange issue with the title but as I had cash I was able to proceed and it hasn't been that expensive to fix although it has taken literally years to resolve.

Madcats · 14/09/2021 16:22

We paid somebody to redo the back of our house when DD was 18-24 months. It's actually not too bad because young children aren't especially mobile (we blocked off building works with stair gates or boarded things up so they could only be accessed via the garden). We rebuilt an extension housing a bathroom, kitchen and utility room.

We borrowed a friend's house during demolition work (they were travelling so quite pleased to have us keep an eye on things). I also checked us in to an Airbnb a couple of times to have a bath!

You never know with auctions. Is it for probate or a repossession? A distant relative with an unexpected legacy might be sympathetic to any pre/post auction offer.

Calmdown14 · 14/09/2021 18:32

Agree it is a stretch too far. You are in a good position. You don't need this kind of risk in your life.
In your position, I'd be looking to move up the ladder but not in such a big jump or in such a wreck.
You need something in dated but reasonable condition that you can live in okay with the kids and then stick a huge extension on.
Something more suitable will come up and you have time on your side. Little difference in impact changing school now or in a year really