Auction - can this work? How?

[LoonyIdea]

Here’s the bare bones:

I’ve seen a house I love, and it’s up for auction on July 21st with an auction house.

It’s a G2 listed house with some land.

It was previously on with A normal agent and an offer was accepted at £500k but it didn’t complete as the buyer’s solicitor wasn’t happy with a building certificate related to the underpinning. The old agent revealed that they believe the reserve to be £500k.

It is owned by MAG (Manchester Airport Group) who bought it as a compulsory purchase as a part of the A development, which never happened. They sold a lot of their portfolio but kept some with land, and this has been rented since.

My position:

I bought my husband out of my house as a part of our divorce and I now have a mortgage of £195k. My house is very saleable, on a popular estate and worth about £700 on a good day, £670 on a bad one. (Based on 3 local agents)

It was recently valued at £631 for the purposes of the remortgage as that was the figure I’d agreed with my husband some time ago.

I can put my hand on about £20k cash and everything else is in pension and in this house.

I earn £40k, PAYE.

And I really want to buy this house! How can I make it happen?

I had thought I might ask the seller to accept an offer prior to auction but if it’s ordinary auction terms then that doesn’t help me - I need more time, as it’s a cash flow issue.

I’m willing to pay a bit more for it and would go to £520 which I don’t think they’ll get at auction. The guide price is £475.

The house is uniquely unattractive to other buyers - it’s hard up against the motorway the plot is a Scheduled Ancient Monument, and the majority of the land at the back has no vehicular access at all. You can get a mower or a horse in and that’s it. And the house is a (properly underpinned) wreck. I however, love it and it would suit me perfectly.

im talking to some “we buy any house” sites and they’re talking about 75-90% of market value and could complete within a few weeks.

How should I proceed? Is this even possible?

I would speak to an independent mortgage advisor and see if the figures are doable and speak to the estate agent listing the property, and ask them to put forward an offer on your behalf for the property.
You might be lucky and get what you want.

If the offer wasn’t accepted, but the financial side is doable, then speak to the agent and get all the info you can on how the auction works (they are an utter mystery to me, but I think you have to complete within a very strict deadline and pay a deposit on auction day?). And don’t bid over what you can afford! - maybe someone offers a service that guides you through the auction process ? - again I would ask the estate agent.

good luck and I hope you get it.

If it is a listed building being sold at auction it could be a huge money pit. You won't have time to get surveys done before the sale so you will just have to trust your own judgement on how sound the building is. It also might be unmortgagable in its current state. Have you viewed it? Is it in a move in state?

Can you phone the agent listing the property and ask?

I have to admit I thought auction properties were only for cash buyers. Simply due to the tight timescale for completion of the transaction.

Good luck. I think you're crazy!

Yes it’s habitable but I’m fairly sure it’s unmortgageable. And most listed buildings are money pits. I have my eyes open though. This house would leave me pretty much unencumbered, and it is in all other ways perfect. It has been underpinned and all the drainage and sewage done in the past 2 years, I have been through the planning consents. But it’s old old and I suspect will always have some issues

I’ve spoken to the previous agent. I’m talking to the agent looking after the auction (separate company) tomorrow to see if there is anything that can be done, but usually bids accepted before the hammer are dependent on immediate exchange and I don’t have the deposit (10% plus vat)

why why why....? it's going to be impossible to sell!

is all the equity yours or do you have to split it? either way you are talking about throwing away 40-50k of equity to sell your house in a fire sale to buy a wreck

I don't think you're crazy at all - but my understanding is also that properties which are for sale by auction aren't mortgageable. Even if you bought it ahead of the auction, I suspect you still couldn't get a mortgage on it as there's no way to ascertain its actual value, or even whether it is likely to fall down. I have bought properties this way, and it has always been cash only - but things may have changed!

I like it. And they can remove me in a box.

I don’t need a mortgage, I just need to get the equity out of here, pay off the outstanding and move. In 2 weeks <hysterical laughter>

If I understand the OP your house is worth 630, mortgage is 195 so you have 435 equity. if you sell it at 90% then your equity will be 372

How are you buying a 500k property without a mortgage? Not being arsey just want to understand

The equity is all mine. I’m sitting on about £500k

Sorry OP - misunderstood about the mortgage. Blame a sleepless night for inability to read!

can we see it op?

have you thought of the practicalities, the cost to heat it, council tax etc? You are not a big earner and it could be very costly to live there.

Ah I see. The market value for my house is 700, but me and my ex agreed 630 when we first split and that’s the figure we have worked with since, which doesn’t take into account the rise in the market.

I owe 195. So that’s 505. I realise that’s back of a fag packet and doesn’t include fees and costs but roughly that’s where I’m at.

I don’t want to post a link to it, for obvious reasons - I’d have a v small or no mortgage, plus earnings plus maintenance. It’s doable.

if you love it and can make it work, all power to you, and I mean that genuinely - best of luck

Thankyou! I just need to work out HOW to do it! Can it be done, etc. I’m planning on BEGGING the auction company to be more flexible with the timescale.

Sorry OP, I can’t see it working, vendors decide to take a property to auction for a quick hassle free sale. You aren’t a cash buyer, if you are reliant of selling your property to raise the funds. Depending on the chain it could take 4-6 mths to complete, I don’t think the vendors would accept an offer from you. Auction fees are payable immediately, deposit and usually completion under a month. I just can’t see how you could buy it.

That’s kind of what I’m concluding - although I’m looking at bridging loans, webuyanyhouse, etc. There must be a way, although it might not be worth the cost. I need to get my head around how it might happen.

As I said upthread - you need to see an IFA or mortgage advisor for the financials. They will know if there is a financial product that will help - and it’s cost. (All I can think of is remortgaging existing property or a bridging loan - but I know the financial peeps are wizards…) Speak to the estate agent. Maybe even discuss it with a solicitor who deals with auction properties - or the auction house itself.
If you do nothing, you definitely won’t get the property!

This I’m afraid

Thanks, will do.

I think though that a remortgage or bridge will take me over the LTV. Damn.

Echoing others here, if it's up for auction, they want the deal finished in 30 days to a buyer with the ready cash. I'm also nervous for you over the sale price. The market in much of the UK is red-hot because there simply isnt the supply available. Also, auction prices are always low to attract interest, so it could go higher than 500. I hope you get it though, I'd love to hear all about it. Are there any additional auction costs to bear in mind too?

If I were as desperate as you, I'd move heaven & earth to quickly speak face-to-face with whoever has say over the house.

Im hoping that because it’s a massive company selling, that they can be persuaded to sit tight till I can complete. I can afford it, it’s just the time pressure.

As I say, it failed to sell at 500 cos of its condition.