James
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| posted on 22/1/07 at 12:43 AM |
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Buying a house at auction
Anyone done it?
There's a place I'm interested in buying for my first property. 
But it's being sold at auction (in 2 weeks.  ). I have never been to any sort of auction let alone one for houses.
Any tips or info I should have?
What do you do?
Do you pay there and then if you win the auction? Or do you get time to get the money? Would seem weird for buyers to have to go to all the
effort/expense of arranging a mortgage if they didn't then win the auction!
Thanks!
a nervous James!
[Edited on 22/1/07 by James]
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"The fight is won or lost far away from witnesses, behind the lines, in the gym and out there on the road, long before I dance under those lights."
- Muhammad Ali
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gingerpaule
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| posted on 22/1/07 at 12:55 AM |
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The only thing I'd say about buying a house right now is hold your horses. If the interest rates go up another 0.5% before the end of the year
there will almost certainly be a drop in house prices as people start over stretching themselves. It might be worth holding on a bit. Imo of course 
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spaximus
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| posted on 22/1/07 at 07:52 AM |
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That is the problem for you. Most mortgage compamies will not lend cash on a property they have not had an inspection done. They have to know their
cash is safe.
You have to complete usually after 7 days and have to put down a fair wack on the fall of the hammer. there can be bargins but the usual searches a
soliciter will do are not able to be done so assume that the house is a big fat problem and you will not go far wrong.
I would advise a first time buyer to tread very carefully unless you are a builder. On most property programes they make money due to a rise in value
of the area not the work they do.
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russbost
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| posted on 22/1/07 at 08:25 AM |
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Many properties at auction are there because they would be hard to mortgage on the "normal" market - so be wary. I have bought at auction
several times (& not dropped a Ghoolie - Yet). You usually have to pay 10% of the bid price & sometimes an indemnity fee on top, there &
then, you can normally pay by cheque, but the funds must be there ready in your bank a/c. You then need to complete the transaction usually within 28
days, tho sometimes there are special conditions of sale & a shorter completion period - can be as short as 14 days!!! You therefore need a
solicitor already setup & ready to go - it's wise to let him see the legal pack on anything you're thinking of buying b4 you bid in
case there is anything which would make the property worth less or which you should know about b4 bidding.
As you can see, it's not straight forward - if you're planning on using a mortgage rather than cash then that already needs to be ready to
go too - as if you go over the 28 day completion there are costly penalties, you could even lose the purchase & your 10%.
Always remember - Caveat Emptor, Buyer Beware!
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NOTE:This user is registered as a LocostBuilders trader and may offer commercial services to other users
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fesycresy
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| posted on 22/1/07 at 09:38 AM |
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I wanted to buy a house at auction about 10 years ago, it was old and needed a lot of work.
None of this was mentioned on the auction paperwork. The picture was from quite a few years previous and not a current one.
Now, I'm not recommending this, but I broke into the house to have a look around. Glad I did, you name it, it needed it, from sub floor timbers
to the roof.
The house went for well over the odds, in fact more than the estate agent wanted for it !
If you're serious about auctions, then the money must be in place and set yourself a limit. Stick to it, don't get auction fever 
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The sooner you fall behind, the more time you'll have to catch up.
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PeterW
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| posted on 22/1/07 at 12:02 PM |
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One sure fire way of not going over budget.... Send someone else !
If you really want it, but are stuck with a budget, send a friend who you trust with a fixed price...! That way you can't get caught up in
auction frenzy...
I do that with cars too, as some people don't know when to stop !
Cheers
Peter
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Confused but excited.
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| posted on 22/1/07 at 02:06 PM |
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If you are looking for a fixer-upper and planning on doing the work yourself, an idea might be to see what property doesn't sell, then make an
offer to the vendor after the auction.
Tell them about the bent treacle edges!
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spewing
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| posted on 22/1/07 at 04:24 PM |
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Even if you feel that you cant buy the property at auction becaues you cant raise the funds imediatly it is still worthg going to the auction as if
the property dosnt meet its reserve you are then in a position to make an offer subject to raising the funds in the same way that you would normaly
buy a house.
Ive been to auctions and seen property not meet its reserve and be withdrawn only to have 4 people make offers, subject to raising a mortgauge etc
way over the reserve price. They just wernt able to stump up the money within the 28 days
Kev
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Schrodinger
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| posted on 22/1/07 at 04:55 PM |
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I'd go along with all of the above but if you want to buy get a valuation done before you go along and bid,
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James
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| posted on 22/1/07 at 05:49 PM |
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Thanks everyone, all useful info.
Still lots of thinking/research to do so will update you when I know more.
Cheers,
James
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"The fight is won or lost far away from witnesses, behind the lines, in the gym and out there on the road, long before I dance under those lights."
- Muhammad Ali
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JoelP
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| posted on 22/1/07 at 10:17 PM |
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ive bought 4 at auction. Easy, as said its usually 10% (cheque was fine for me) and 28 days to finish. Its actually 35 days anyway, as after 28 they
send a notice to complete, and you get 7 more days. Not worth relying on this though. You need a competent mortgage broker, mine can organise sales at
auction no probs, though ive never used a mortgage to purchase an auction house before. Solicitor wasnt such an issue, he was crap and still completed
on time.
Some sellers will request 14 or 7 day completion, it would say if it was though. Quite rare, i asked for 7 day completion once and the seller wouldnt
do it.
Auction houses arrange viewings, there no need to break in! 
Deffo go to a few auctions before bidding, you'll probably have a heart attack if you rush it! Serious adrenalin rush from the first bid.
And to those who say dont buy now, maybe you are right, but people were swearing blind it was about to crash 3 years ago. You cant wait forever.
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