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?

Have you read the legal pack sometimes you are liable for all the seller's costs too just be exactly sure what you need to pay over and above hammer price commission etc etc

Just because it's going to auction doesn't mean it'll sell at auction. I'm writing this sitting in the house that failed to sell at auction. I was buying on the same street and only noticed it 2 days before the auction, not long enough to get things sorted (plus I was already committed to buying another house). Long story short, my purchase fell through and the auction property failed to sell at auction. I bought for similar to auction guide price, which was significantly under market rate.

It didn't sell at auction because it had been 'done', according to friend who's a builder plus there were potential issues with the property which put people off (even my solicitor wasn't keen!). I've been here 10 years and it was probably the best purchase I've ever made! It sounds like the property you want to buy isn't straightforward either so might also not be an obvious auction lot. It sounds like getting a mortgage would be difficult (so no good to developers who'd want to sell on) and G2 would be a nightmare as a rental, especially given the new regs regarding EPC ratings. So if you can't get it sorted before the auction, you may still be able to get it after - and at a reduced rate as it's failed to sell. Don't panic, it'll come to you if it's meant to and if it doesn't, there's something even better waiting for you.

Please discount the buying it at auction thing. Bridging loans etc are such a waste of money. You also need to do a lot of due diligence around the structural state of the property. Just because work has been done recently and you believe it to be fine doesn’t mean that it is.

There is simply not enough time to get all the surveys etc done that you need before the auction date. Speaking as the owner of a Grade II listed house who had extensive surveys done before buying and ended up with a £120k bill to remedy unseen issues with the floors and walls that hadn’t been picked up.

There is a reason this property is going to auction. It might be perfect for you, but if it’s THAT desirable from your comments and others who know which house it is, then alarm bells should start ringing that it didn’t sell through normal channels. It would indicate that there are some pretty fundamental issues, including it probably being un-mortgageable.

Having also bought an auction property I would agree with a PP that tricky houses do fail to sell at auctions. Of course there’s no way of knowing that, but if it does fail then you are in a much better position. Also, is your property currently even on the market? If you were under offer then any negotiations you try to enter into before the auction will be given far greater credibility. I mean, why would they sell to you if you aren’t in a position to proceed? It’s all very well saying you want it and can afford it, but actually right now you are months away from being able to logistically do it.

I would, however, say that I am a great believer in fate. If it’s meant to be then it will be.

Thankyou. I truly appreciate your perspective and it’s helping to crystallise my thoughts which are increasingly less loopy.

I spoke to a property consultant this morning too and he said the same. He’s suggested making a non refundable deposit offer to the original vendor to allow me to buy it at a more proceedable pace in the hope that they take pity. It’s a long shot and I’d run it past my conveyancing solicitor too so it’s legit. That might get their attention, assuming I can find the decision maker.

I have attempted to buy at auction in the past. Sometimes properties do not reach their reserve and are withdrawn. You would then be able to approach the seller after the auction. I live locally to Auction House and often deals are done afterwards.

I also tried to buy an old farmhouse, the sellers of which withdrew it at the actual auction as it did not reach the offer they had pre-auction.

My final attempt was via my own solicitor who attended for me. I was unsure how much it would go for so I put a small mortgage in place should I need it. Initially the surveyor said that all funds should be withheld until various works were carried out and I actually asked the Building Society to look at this again and they agreed with me. Be this would not happen now! I did not get the property because the wealthy next door neighbour did not want neighbours and was basically prepared to pay any price for her privacy. Did not see that one coming.

You mention underpinning and I personally consider this a blight on a property, Solely my view op, but Banks are wary. My dd looked at an underpinned property and the successful bidder found the works had to be done again. As ever caveat emptor, let the buyer beware.

Thankyou that’s VERY interesting! And the bit about the wealthy neighbour, they’re the curve balls no one sees!

latest developments:

2 bridging loan companies called before 9am.

a “we buy any house” type called and offered 500 for a 7 day completion, or 595 for a 56 day completion. I think the 56 day thing is a nonsense, because further investigation reveals that essentially they just have an “option” and sole agency for 8 weeks. From what I’ve read these companies also drop their offer at the last minute.

Went for another nose, and to nick a bit of render for analysis; if it’s not breathable I’m walking away.

Then I got a local agent over who reckons he could sell mine smartish for 675, and to work on 650 as a final figure. He’s a bit of a local property guru so we had a good chat about the vendor and what they might take as an offer, who to speak to, how to handle the auction house etc. Cheers Bob!

Then I took a deep breath and called the original agent and asked for the decision makers details at the vendor. He said he couldn’t do that but then let the name slip anyway!!! He was quite off putting and said he could submit an offer as he knew “Jim Goddier really well” and I was up front about my situation. I’ve offered 520 and a £10k non refundable cash deposit if they take it out of the auction and let me proceed. I don’t think they’ll take it but if they did then that’s the best option for me.

And, spoke to a property advice company, at length about the elements of bridging and cash buying agencies and may investigate bridging even further. The servicing on it is monumental, and it’s a risk, and the issue I have is that it’s hard to demonstrate the value of the new house without a survey, which will undoubtedly show its knackered.

so I don’t know if I’m further on or not.

if I took the cash offer then effectively I’m sticking the total equity I’m losing, onto the purchase price of the new house and I have to see if it’s worth it.

head is all jiggly.

all thoughts, insights and vibes greatfully received!

My tuppence fwiw! You ARE further on than you were yesterday.

1. Finances have been balanced to your satisfaction
2. A plan for purchase and sale has been made. Including making an offer.
3. plan has been acted upon. (4) sneaky bit of survey work is now in your hand to be tested for nasties.

please keep us updated!!

Talk to the sellers/auctioneers.
Normally, an auction property will need the money up front.
They don't normally deal with mortgage lenders or financiers.

I’m really puzzled by your determination to buy this wreck of a house.

I could understand at £50,000 with loads of capital left over but not £500,000 and all that you own.
This is such a huge risk, you could be left with nearly nothing. Please do some serious thinking.

@LoonyIdea keep us posted, I really hope it works out for you 🤞

I love this completely mad plan amd I hope it works out for you!

It might bot meet its reserve op. I would speak to the agent and explain your situation clearly.

I think this is utter madness. I’m missing something obvious but how are you going to pay for doing it up? You’re only on £40k per year. Building costs are astronomical for regular houses let alone listed ones. Do not do it!!!

I probably can’t explain it to any reasonable degree but I’ll try.

Old buildings matter. They do. They shape us and very old domestic buildings are a link back through to the lives of the people that lived there. Anything that has survived for generations is there for a reason. The beauty of vernacular historical architecture is that every last nail and board has lasted because it had a purpose. If it had served its purpose it would have been replaced, just the same way as we throw away what we don’t use. Except nowadays the consumer society doesn’t need to keep and treasure things the way that more lowly previous people might. You couldn’t nip to wickes to replace the door handles. Everything pretty much was made for that door in that building.

Then there’s the patina of the fabric of the building, the way in which the wood on staircases is dark and smooth from the hands of hundreds of people over and over. Nothing can recreate that.

this particular house has a slightly funny layout and uneven floors upstairs because originally the central room didn’t even have an upstairs, there was a central hearth and the smoke wafted around freely until a brick chimney stack was inserted. That meant that a fireplace could then warm two downstairs rooms and an upper floor could be inserted. All this is there to see if you know what you’re looking for.

The mantlepiece in one room has an enormous bressumer beam, which looks like it has come from somewhere else, or as I suspect, from an earlier house on the site as it is carved on both the front and the hidden side.

Houses of this type were often built facing east (as this is) and the bulk of the plot is behind it. It’s on a raised point in the landscape and has a beautiful view at sunset, west over fields. There is a sheltered terrace at the back which gets the evening sun. There is a pond with a fishing platform and it catches dappled light from an enormous ancient willow.

There is an overgrown bit which I had a poke about in, this afternoon, only to realise it is an orchard. There are apple trees in a row, huge trunks on them and very heavily fruited, and behind that are cob nut and hazelnut trees. Alongside are blackberry and gooseberry.

There are some ancient earthworks nearby which contain another enormous willow, and there are huge and evenly planted rowan trees. The whole plot is sheltered by a line of oaks. It was quite a still day but I could hear the willow and rowan rustling.

It is not a house for everyone; I’m prepared to live with primitivity. It will likely be a money pit and it isn’t perfect. It’s a funny layout with bits of stairs that don’t go anywhere and corridors with dead ends. It will be cold and draughty and probably haunted, but it is 700 years old and I have wanted to be the earthly custodian of such a treasure as long as I can remember. The thought of having a tiny slice of the story of something like this makes my skin tingle. So that’s where my determination comes from - years of obsession.

Oops rambled a bit.

Yes OP, of course old buildings matter. And it sounds stunning.

But how will you pay upkeep and renovation? And when you can’t, how will you sell it and to whom?

this is your whole financial future on the line….

My PAYE is 40k. Maintenance etc is another £2k. I don’t drink or smoke, so I think my income is ok. Not wealthy but alright. I don’t aspire to a Smallbone kitchen, the bathroom was redone fairly recently. The rest is cosmetic and I’m quite handy.

I will need a ride on mower though. Or sheep.

I’m in my fifties. I don’t intend to sell or move. It is smaller than the house I have now. The energy bills will be interesting, admittedly.

Id be tempted by shepherds hut type Airbnb or similar in the grounds. There’s a couple of acres.

And I’d have a minuscule mortgage.

I think your heart is talking over your head!!!

Is it so wildly financially reckless though? I know it’s not everyone’s cup of mead but I’d have an amazing house in amazing grounds and a reduced mortgage.

I think you know what you are taking on, including the risks.

This is more than a place to live. You want this to become your life and your achievement in life.

I wouldn't do it in a million years, but I am certain that you should at least try to get this house and wish you all the luck in the world. Let us know how it goes!

Interesting thought about working up some business ideas based around the house. I think there is some real potential there to support the upkeep of the house.

I think you are amazing op and I love how much you love this place!

I really hope it works out for you, keep going, I don't think you're crazy at all, it sounds wonderful and you deserve this!

Op, you have a passion and that will carry you through whatever happens if you get the building. Yes, some will see it as reckless, but that’s them thinking from their perspective on life, just as you are speaking from yours. Life has to be lived as an individual, not as part of a unified blob ticking off a list of must have achievements.
I speak as someone who has lived off grid for the past 23 years, much to the absolute horror of many. But it’s been a blast, and I wouldn’t have wanted anything different just to ‘confirm to societal expectations’. No regrets.

I bought mine in 2009 at Auction. I have a mortgage. It was initially an Ibterest only mortgage as well.