First time buyer and viewing a house that's going to auction .. help

[CrazyMonkeyBars]

Evening all..

I was hoping some of the more experienced property buyers/sellers on here could help me please?

As the title saids, I'm a first time buyer with a good sized deposit (family help) but I'm buying alone. House prices where I live have increased so much that it's becoming a lot more difficult to get my foot on the ladder.

I recently saw a house that was being advertised via right move through an auction. Originally 145k but then reduced to 125 in the space of 3 weeks. Last sold in 2014, I'm not sure what the circumstances are or why it's not being sold on the open market. Have driven past and the outside looks ok from what I can see. No pics of inside.

I phoned yesterday to get some more info and explain my position. I was honest and said I wouldn't be interested or in a position to go down the auction process (as I believe I would have to pay fees upfront if my offer was accepted (?) which I'm not willing or can afford to do) and the sale has to be completed within 15 days which isn't possible as I would need to get a mortgage. The lady I spoke to said that the vendor is willing to consider any offers beforehand so I've arranged to go and view the property next week, a couple of days before the auction. It's an open viewing so I'm not sure how many other people will be there.

I can't really make head nor tail of the description online and even though the lady that I spoke to said that the vendor may be willing to consider offers beforehand, I can't see that anywhere in the description online (I have looked at other auctioned properties before on rightmove/zoopla and they normally say if that's the case).

I suppose nobody can say without seeing the description themselves (although I don't really want to post the link as it'll be outing), but how does it normally work with properties being sold through auction? The lady wasn't particularly helpful or explained things very well, but then again I might not have explained myself properly either... if I was to put an offer in after viewing beforehand, would I still need to pay fees upfront etc like I would if I bid at auction and also complete the sale within that time frame? This is what I'm concerned about. I don't want to waste my time or theirs by going to view if it that is the case...

Sorry for rambling on, and hopefully someone has experience in this area.

Thank you

You absolutely can make an offer pre-auction (we have in the past). In our case, they rejected it and wanted to go to auction. The auction bid only got to about £50k less than our offer. They came back to us after and said they wanted to re-consider our offer as auction didn’t meet the reserve.

Unfortunately, auction properties are usually put to auction because the seller wants to move fast without time for things like a proper survey or time for sufficient conveyancing. In our case, the sellers said they’d accept our offer but only if we exchanged the next day without our solicitor being able to fully review the legal pack or any survey or further inquiries. We said no thanks.

In your position I’d only proceed if they were happy to move at your pace and you didn’t need to pay anything up front. Unfortunately, the big risk is paying a deposit and fees, but then finding out the property isn’t mortgageable, as you would then lose your deposit for pulling out of the sale.

Unless it is your dream house, I would never advise a first time buyer to buy through auction. There is no time to do proper surveys, digest any findings, renegotiate based on new information found from solicitors etc. The risks are much higher.

Agree. This is a bad idea. You are risking you money on your inexperience.

Is it a “modern auction” from one of the fast selling agents? If so it’s not really going to auction. It’s just marketing and getting a bit of fee off both of you.

I am not of any help with the financial aspect of this, however, if possible, I’d find out why the property is up for auction. There’s a house a couple of streets away from me, belonging to friends of friends, which is up for auction…they moved out over a year ago , after they were targeted by a team for robbery with violence. 6 masked men broke in during the night, armed with weapons. The shock killed one of the family. Police said they were definitely targeted, and advised moving, as such teams often come back later and do it again. I don’t know if the latter is true, but not unreasonable to ask the question.

You will have to move fast. You should already have your mortgage offer in principle before looking at any properties like this.

The house may not be mortgageable. This is a common reason why houses are sold at auction. It must have a working toilet and "kitchen" (sink and oven) and be weather tight and not have any serious structural issues. Good luck.

I don't think this sounds like a good idea. My Mam buys houses at auction and flips them. You never know what you are going to be getting really. It's quite a risky business.

It's easy to get dazzled by a house that's going to auction that you wouldn't otherwise be able to afford.

In theory, you view and like it and make an offer. They say yes. The property doesnt go to auction and.you proceed with a normal Estate Agent sale/purchase.
However, unless you have your mortgage in principle and are ready to start the process, they will likely still take it to auction. Where as youve said its not of interest to you.

The big issue is not having a structural survey in time. You will expect things to be wrong with suctioned houses. What happens if the mortgage isn’t forthcoming because the house has big issues? I really would buy something smaller conventionally.

We bought our first house pre-auction.

It had a pre-auction open day for viewings and we took our surveyor to that. Following that we made an offer of what we thought it was worth. We had a mortgage in principle. It was accepted and we proceeded as per normal estate agent. No upfront fees.

Hello... thank you so much for all your replies, info, advice and I'm sorry I've taken a while to get back to you.

I agree that I was out of my depth with this one, so I asked my dad if he could speak with the auctioneers to get a bit more info as he's bought and sold many houses over the years, not through auctions but still has a lot of experience.

Apparently it is owned by an elderly man (he's rented it out for the last 2 years) who just wants rid of it, so there doesn't seem to be anything sinister about it (even so I'm sure my solicitor/surveyor would pick this up). I drove past the house yesterday to have another look and coincidentally the people who were renting it were outside loading their stuff onto a van. They let me in to have a look, really nice of them. The house is lovely, small but has a lot of potential. Quiet street, lovely area. I really like it.

As I mentioned before, my understanding is that anyone who offers before the auction and has their offer accepted will still need to put down a 10% deposit upfront and also complete within the 15 day timeframe. My dad explained to them (as did I before they booked me in for the viewing) that wouldn't be possible as I will need to get a mortgage (I already have a mortgage in principle, solicitor lined up etc). I especially wouldn't be happy to pay a deposit upfront incase it went tits up later down the line. They explained that they have their own people that I can use to complete within that time, but again I don't feel comfortable with this as I want to use my own solicitor. I also can't see the mortgage lender doing it that quickly either (?)

We've agreed that if I want to put an offer in then to email them and say this is what I want to offer, subject to these terms and conditions - satisfactory survey etc and deposit will be paid as normal when mortgage goes through. I will explain that I can move quickly and hopefully it would be quicker than the average 3-4 months, but definitely not within 15 days.

I was due to view it Tuesday (it goes to auction on Thursday) but now that I've viewed it early thanks to the lovely renters, I can put an offer in on Monday. Does this sound like a good idea? Any advice or anything that I would need to add to my email? I fully expect it to not work out, as others have said if the vendor was happy to wait then he would have put it on the open market in the first place and probably got more money for it too, but I figure it's worth a try and it can't help to test the waters. The worst they can do is come back and say no. It may still go to auction but as another poster said earlier they may come back to me if it doesn't go well..

What do you think?
Positives/negatives just say what you think

@Sunnyshores sorry I didn't explain myself properly before, I find it difficult to explain what I mean sometimes, especially over text . I do already have a mortgage in principle, solicitor lined up so I can move quickly, just not within 15 days and I certainly won't pay any fees upfront...

A house near me was up for £550k, then relisted at £490k, then relisted at £425k, then put up for "modern method of auction" at offers over £410k. A local architect told us a few years ago that the style of house (flat roof) leaked like a sieve and several had been fixed at massive expense, so I guess that's why it ended up going to auction - to avoid prospective buyers that might get a survey showing it potentially wasn't a watertight property.

Be aware of any "reasons" for a quick sale that might well just be a cover so you attention is drawn away from some real problem.

Thank you @DogDaysNeverEnd. I completely agree with you. I know there might be a number of reasons why he wants a quick sale other than he just wants to get rid, and this is why I'm being really cautious and won't pay any fees upfront. I will only put an offer forward if the vendor is happy to go at my pace and down the normal route of survey first etc. In theory I I know he probably won't be interested in this as he would have just put it on the open market otherwise, but I do think it's worth a shot. I just need to word my email the correct way so they understand my position.

Def worth offering if you like it. Some councils used to do express searches, you could ring and ask about that. You also may be able to use the vendors solicitors office (not same person), again this would speed things up. Send your MIP, proof of deposit too.
And finally, add a personal touch that may appeal to the vendor ie youre not a landlord or developer, are a long term local, hope to raise a family there.....

Good Luck

Some councils used to do express searches, you could ring and ask about that.
Wouldn't that all be in the auction pack? Is that up yet? That's worth trawling through before getting too invested. When I've bought at auction, it's been 28 days, and I thought that was standard. I wonder why it's only 15 days? Good luck!

It sounds fab! I think if your offer is accepted the seller will wait. You will need a survey, your mortgage will come through quite quickly.

Alot of auctions are to encourage cash buyers but you are in a strong position.

Auction properties are generally sold as seen with no potential to reduce price after surveys. In fact often people just get a mortgage valuation and don't bother with a survey and deal with issues after they take on ownership. Any crap left in the garden or house will also be yours to deal with. If you want it then go it with a reasonable price and reassure the vendor that you will not be delaying the process with surveys or asking for any reductions. You may get it. Fingers crossed for you. You could also consider a bridging loan to buy it at auction which you could pay off once your mortgage goes through.

Thank you @Geneticsbunny

Sorry I think there may have been some confusion. As a first time buyer, I'm not interested in going down the auction process and certainly wouldn't buy a house without a proper survey being done. Apparently the vendor is willing to consider offers beforehand but wether the 15 day timeframe and fees upfront is negotiable I'm not sure. I'm in a position to proceed quickly, but definitely not without a survey etc and I wouldn't be happy to pay any fees upfront. That's why I started the thread to see if anyone had any experience with this before and whether the vendor changed their mind and was happy to proceed as normal.

Email sent with offer. I offered full asking but only under the condition that we proceed as normal and I'm given more time to have the survey done and both parties agree on a exchange/completion date. Absolutely no upfront fees either as I can't take the risk. I believe it's worth the price so thought it right to go straight in with my best offer, and hopefully the vendor might not have an issue with my "terms and conditions" given that I've offered full asking. Who knows! I'm not sure if he will get full asking at the auction if he still proceeds with that, but he could come back to me if it doesn't go well. I'm not holding my breath, but if I don't try I'll never know. Also downloaded the legal pack from the auctioneers website today and from what I can tell everything seems ok (asked my dad to read through it but of course he isn't a solicitor. I would leave that to the professionals) Fingers crossed 🤞

Also added a few nice little details in the email of how lovely I think the house is. Hopefully that will sway him too 😅

Good luck! 🙂(Do you mean you offered £145k?)

Thank you so much @Gastonia

No the guide price is 125k. It was originally listed at 145 but then reduced a few weeks later.

You may know this already, but generally, the agent reduces the price to get more interest at the auction, hoping (expecting) the property will go for above the guide price on the day, with a bidding war (assuming it's not the "modern method of auction"). Therefore, the seller might be unlikely to sell for less than the auction guide, and with the longer completion etc.

However, it may turn out that not many people turn up at the viewings, particularly with the economy at the moment, so fingers crossed. And in any case, even if the sellers refuse your offer, it might not sell at the auction. You seem so optimistic and unjaded, that I think you deserve to succeed.🙂