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Im going to bid on a house at auction on tuesday.
Ive found a bit of history on it. It was sold to someone at auction in July this year. Now its in again in exactly the same state as it was sold last time. Should this worry me?
Ive looked over the legal pack etc and everyhting seems fine....
Certainly warrants further investigation, do a planning search to see if they made any applicqtions.
Definitely worth being very cautious. There’s a reason why the buyer hasn’t looked to improve the property, and you don’t want that to be your problem.
I'd take a further look - the planning thing is a good shout.. but the outlook has obviously changed for a lot of people this year and that will include investment possibilities/choices.
Most properties at auction have a hidden problem/defect. There’s normally a reason they don’t sell on the open market via an estate agent . Go in with your eyes wide open! Also remember when the hammer goes down you’ve bought it and it’s treated as an exchange of contracts with completion normally around 28 days thereafter so make sure you’ve got your finances in place to be able to complete in time
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I bought a property at auction in July without even viewing it .
Maybe the buyer under estimated the work needed to sort it .
Maybe they lost there job ,there’s loads of things ,but then it maybe a total wreck but it depends what it goes for .
The main thing is there’s nothing hidden in the legal pack
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Unless you’re a solicitor, I’d be tempted to get one to look over the legal stuff.Quote:
Originally Posted by smurph306
Probably too late for Tuesday, to be fair.
Caveat empor
I think a lot of mortgage companies have an issue with houses bought and sold in under 6 months. Not a problem if you’re a cash buyer, but if it’s a concern for lenders then should be for you and worth trying to establish why.
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I buy houses at auction, as said the legal pack is a good first step, also call the local council and ask if there is any outstanding building issues, the last house I did had a problem with the outside wall but wasn’t noted in the legal pack.
Check it’s traditional build, if not it’s hard to get a mortgage, and any property without a kitchen, bathroom or sound roof is un-mortgageable and check any lease holds for time remaining, yearly fees..
Lots of hidden issues like dry rot, minor subsidence, flood areas equaling no house insurance or dreaded Knot Weed which will not be visible during the winter, not all these things will be mentioned in the legal pack so do your homework..
Quote:
Originally Posted by Omegamanic
That would be my outlook. Could be a case that first buyer didn't do sufficient due-diligence, and is hoping there is another buyer similar.
Of course - it could be the first buyer's situation changed.
I'd even go so far as to ask neighbours what activity there had been in the intervening months.
Thanks for the infor guys! Very useful.
The house is two bed end of terrace. It needs renovation. Ive looked at it threee times. Once with a builder. It seems fine physically.
Im a cash buyer.
I checked the title on Land Registry and it has the same owner since 2001. So I assume this means that the buyer 5 months ago didnt or couldnt go through with it? Would this be updated immediately on Land Regitry if they did?
Ah-hah! I wonder how that works? What is the penalty for a buyer not going ahead with a house auction?Quote:
Originally Posted by smurph306
Always possible that he simply didn't complete.
Iirc you lose your depositQuote:
Originally Posted by blackal
Quote:
Originally Posted by blackal
The auction bid, as I understand it, creates a binding contract. Not sure how it would work but assume the bidder would be responsible for costs and loss of any profit if the property resells for less. The seller would presumably have to take a view on whether it was worth chasing a shortfall.
The one time some friends and I bought a property at auction, we had to give a cheque for 10% on the spot.
Its ten percent on the day of auction.
According to records this sold in July for 165k.
So he will have paid £16500 on the day plus £6k fees.
Thats why i was expecting to see a change of owner on the land registry. Unless you are allowed to just not register as an owner for ages??
Subsidence? End of terraces can suffer from this.
If it is and it’s not cost effective to repair, how do you intend to move it on. Third auction in a year?
You've answered a few of my Qs ("Isn't there a legal disclosure required?"), but what happens if something "that should be disclosed [known but not mentioned]" is not? Does the buyer have any protection?Quote:
Originally Posted by murkeywaters
Most likely not more than the original buyer got. And if you are buying at a foreclosure you're effectively buying from a bank which knows zip so logically should be pretty limited reps and warranties.
In this specific case the seller may just be a flipper which tries to make some quick money.