Anyone know about property auctions?

[AbstractThought]

We are really curious about something local to a house my DH has inherited from his dad. He lived in what was once a decent area that has slowly gone downhill. The house next to it has been empty or disused for around 6 years. First it housed an illegal HMO, followed by a cannabis farm, then a long period of dereliction.

Tidy on the outside, the house is a shell within. There are only 2 walls left and no upstairs floors. Ancient electric cables dangling about, no plumbing and crumbling walls that were hacked into once the damage from the cannabis farm was ripped out. As you can imagine, it's an absolute mess.

It was eventually put on auction and quite a few people came to look at it at the weekends. After about 4 months of this it looked like someone had purchased it for around 70K with cash.
Houses in the area that are in decent condition tend to go for around 120K.

Since investors and 'flippers' usually take on stuff like this, we were surprised to find a young family had purchased it and were hoping to move in. Expecting workers to arrive soon, only one man (a jack of all trades) began work on it (he didn't even have a van) and spent about 2 weeks hammering at the old plaster remains. The owner looked perpetually nonplussed and told us that it was an absolute mess and seemed incredibly put out and surprised by it all. We came to the conclusion that he had not bargained on how bad it was and possibly regretted his purchase. The owner said he was struggling to fit a skip in the back area then hasn't returned for over a week now. Initially he and his family had been at the house at least daily, seemingly excited. We are wondering if something went wrong.

Could someone be ripped off via auction? Is it possible the buyers hadn't actually visited the house prior to purchase? My DH feels sorry for them and was going to offer to help in some way if he could, but the family have not been back. Would the buyer have any recourse to compensation or be able to sell it back to auction without much loss?

We were chuffed that a family were going to move in as the area is short of regular families. It seems like there are issues but we can't imagine what, really. Why might someone bid on a house that was gutted if they didn't check it thoroughly? We presume they were possibly struggling and thought they could fix it on a budget, I don't know.

You can only really get excited at auction if the bidding goes mayhem and there's loads of buyers. They start at the guide price which the OP says is £40k. To get to 70k means there's lots of bidding and the buyers got too excited and started bidding with the pack
No one would go £70k immediateky

@Neveralonewithaclone "What i meant earlier about figures was with an ebay auction if you bid 90 and the closest one under you is 63, then you pay 64."

OK, I understand now. Despite what a PP said, you can do the same thing in actual auctions.

These are called "absentee" bids or "commission" bids. What happens is just like ebay.

You tell the auctioneers beforehand what your maximum bid is and then when the lot you're interested in comes up the auctioneer will announce that he has one or more commission bids for this lot and then will bid on your behalf against other people in the room.

There is a very good youtube video of how bidding takes place at an auction and what commission bids are here, the relevant part starts at 5:30

So, to answer your specific question, they would pay 64 rather than 90 (as long as that's above the reserve)

we don't live next door but DH's dad did, he left DH and his siblings the house.
We have been sorting a lot over there and got to chat with the guy who bid on it, but he is very vague (could be a language barrier).

other houses in ok condition range between 100K and 130K in this area, it is quite run down now.

I did't know he could have got a mortgage for an auctioned house that is in such a condition. My impression is they do not have a mortgage, but can't be certain.

The area is such that property usually ends up in the hands of flippers who sell on to landlords. Or HMO's. Very few families there.

Since it's been nearly two months now and no professionals have been near it, our impression is that he had planned to do it all with a family friend. After seeming extremely stunned last week no one has been ack since, although he used to be there every day for one reason or another.

One confusing thing is his family (wife and two primary kids) showed up a few times and seemed extremely overjoyed. Yet he always looks so freaked out. There seems to be a disconnect there but that's just nosiness on my part!

We looked at an auction property in 2020, this agent sold a lot of auction properties, especially during lockdown as they could continue to list properties.

We were able to view prior to the auction ( that was probably dependent on covid restrictions) .

This was a modern, online auction. The literature we were given explained that the auction process was nothing like ebay. You would be charged your highest offer. There was also no last minute, as the time was extended after every bid , to give another bidder an opportunity.

Dh is in property and won't touch auctions.. says it works better for the seller than the buyer.

We've been thinking a bit more about this.
DH and his sisters now own the house next door to this derelict property. My initial concern was that the owner looked shocked and confused, but we are now wondering if something is a bit 'off' here.

It is 2 months since this man bought the derelict property, and only 1 other person has visited the property - what appears to be a family member (non english speaking). This is the person who did a week of drilling and hammering in there, presumably attacking some of the plaster on the walls.

It is a very quiet cul de sac and the neighbours are elderly and home all day. No one has seen anyone else there, no surveyors, business vans or builders. From the impression we have, since speaking to the guy, is that no one else has any involvement.

We were there until 6 this evening and he turned up with his 'helper' for 5 minutes, made some drill sounds then left. The other guy didn't have his own vehicle. We could hear some animated conversation that sounded pretty serious/loud but could not understand the accent.

DH is now worried, that if no builders or surveyor have seen the property at the 2 month stage, that there could be some potential issues down the line such as damage to a party wall, etc.

Are we right to be concerned? It all seems highly unusual to us, but maybe it isn't?

You are wise to be concerned. Our neighbours are so called ‘landlords’ and have been renovating /demolishing the nextdoor terrace for two years. We’ve had them drill straight through our party wall and then deny all knowledge and refuse to pay for repairs. Currently they are demolishing the back wall and have left several huge holes open to the elements - these are holes straight through the wall leaving the interior of the upstairs exposed to the elements. They have no clue regarding building works/regulations/safety or even simple respect for other peoples property.

Take a lot of pictures of your (Dh) house just incase you need to claim on your insurance - or like us pray for a quick sale. (Although I secretly hope that next door implodes taking them with it.).

I find it unusual too, but all sorts of things could've happened. If he bit off more than he could chew why would you expect builders etc? Who would pay them for the work?
Are you concerned about the price of your own property dropping?

No, not concerned, the house now belongs to DH and his sisters so it is going on the market. Not expecting much for it one way or another. The neighbour on the other side is concerned about party wall problems. Will def take photo's on 'our' side to keep tabs.

Considering he bit off more than he could chew, how would anyone propose to be able to afford to refurbish it? It makes no sense at all. Wouldn't this be further sinking time and costs? A pp mentioned it might need 100K to patch up, and I can't see how they'd manage it.

Not so much worried as aware that something feels off. A bit concerned if an untrained guy hacks at the walls. We have tried to talk to him, and he's very friendly, but language is a bit of a barrier. I have tried to account for cultural differences but it still makes no sense.

@Alphabet1spaghetti2 That does sound awful. Something similar happened when I was renting yrs ago, and they denied all knowledge. I reported it to my agent and it was all dealt with without my involvement - a perk of renting! I would be mortified to have to endure that, especially if you have to live through it yourself. I hope something gives, in your favour, soon.

Hi Op. Whatever happened to that house and its owners?