X

Sign Up

or

By signing up I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Sign Up

Sign Up With Facebook, Twitter, or Google

or


By signing up, I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Log In

or


Don't have an account? Sign Up

Forgot Password

To reset your password just enter the email address you registered with and we'll send you a link to access a new password.


Already a PT member? Log In

Don't have an account? Sign Up

  • Refurbishment

    Buying At Auction Due Diligence - Legal pack

    Have any of you bought at auction? this is a route I am looking into. Can anyone recommend a solicitor that does not charge my life savings to check the legal packs?
    Do you think its best to bid early, later or it makes no difference. Buy before or after the auction? I have seen many tips on the web about buying at auction most are common sense. What time of the year at auction do you find less buyers i.e Christmas.
    Any other tips would be most usefull, come on tell us your auction secretts.
    0
    0
    Thanks for the reply Richard I was beginning to think this was a dead thread. I now what you mean about private buyers over bidding, I have seen this many time myself at auction.
    Can I please have the details of your friend's solicitor who charges £50 to look over a legal packs? why was your friend £250 out of pocket was this for a wasted valuation?
    Has anyone else been to the auctions of late.
    Richard Greenland said:
    I went to an auction last night (in Bristol), not buying myself but with a friend. I’ve never bought at auction myself so I’m not in a position to answer most of your questions, but I suspect that the trade buyers will have already made up their minds what they will bid up to for any given lot and so strategies for when you bid and how should make little odds with them. But there are also a lot of private buyers and amateurs and wannabes of various descriptions, and unbelievably they really do seem to make a decision on these very large sums of money right there in the heat of the auction.
    My feeling last night was that these buyers took most of the lots, simply because the prices they were paying allowed room for little or no profit once all the work was done. Sometimes they even paid over-market-value, at least according to my calcs. Private buyers will always beat the professionals in how much they can afford to bid, because they don’t have to make a profit.
    We went to the same auction earlier this year and most of the lots went for little more than the guide price. There were fewer people in the room and mostly it was the private buyers who stayed away, I suspect, so the trade cleaned up. A couple of lots even went for slightly below guide (guide isn’t necessarily the same as reserve price). This time, most lots went for about 30% - 50% above guide. A couple of years ago you could go into the same auction and see some lots selling for over 200% of guide – it was absurd. It also says a lot about general confidence in the housing market I think.
    You may still be able to pick up bargains in auctions in other parts of the country, but it’s getting harder and harder here I think.
    BTW my friend's solicitor charges £50 to look over a legal pack I think, but he's still £250 out of pocket and a lot of wasted time from last night. .
    Rich
    0
    0

    Hi

    Can you please share the details of the solicitors who review the legal packs,I would really appreciate.

    0
    0
    I personally believe buying at auctions to be a super-specialist strategy and not for the novice or faint-hearted. I feel it is very high risk. The anagram of auction is caution!
    I think there are far easier and less risky ways to invest in property. Novice bidders very often over-egg the prices for everyone because they have no clue what they are doing. Did you see that programme where two business partners bid against each other, without realising it! They were an accident waiting to happen.
    Your due diligence must be incredibly thorough and you must also have an amazing and reliable team behind you who can turn the project/refurbishment around really quickly - otherwise you are stuck paying the mortgage on something you cannot rent or sell.
    Maybe connect with an experienced auction buyer and ask them if you can shadow them at an auction to see how they go about it. You could offer to buy them a nice lunch for their input. I think Tribal Member Mark Tolley is experienced at buying at auction so maybe he could give you some pointers if you contact him.
    Go to a lot of auctions and see how people behave and react. There is much learning to be done before contemplating putting your first bid in IMHO.
    0
    0
    You might want to think again about buying at auction based on this news report today!
    Buy-to-let landlords flood auction rooms
    Buy-to-let investors are returning to the auction room as UK house prices show signs of recovery, according to Auction Finance.
    Statistics show the auction market is dominated by private investors rather than people buying for their own occupation. In June, 93% of purchasers bought for investment – up from 78% in February.
    In July, the rate remained high at 86% and the amount raised at property auctions was £490m, compared to £470.5m in July the previous year.
    Chris Baguley, director at Auction Finance, which provides finance for investors buying property at auction, said interest in buy-to-let property is rising.
    He added: “A growing number of people are seeing the benefits of investing in residential property, especially as bargains can be picked up at auction. For many investors, they’re proving an alternative to savings rates which are still extremely low. This trend coincides with the fact that the average yield on investment property (the gross profit on capital investment) currently stands at an average of 8.5%.”
    David Sandeman from the Essential Information Group, which tracks auctions, said: “We’re seeing increasing numbers of buy-to-let investors in the auction room and as yields begin to rise more and more investors are snapping up properties. There are still real bargains to be had and in many auction rooms up and down the country, it’s standing room only. Whereas, in recent months, many people were cautious and simply observing, we’re now seeing serious bidders as confidence returns, and house prices start to increase.”
    0
    0

    Lisa All comments are for education and information purposes only and do not construe as advice or a financial promotion. No liability is accepted for comments made. If you wish to receive information in an advisory capacity then please contact me about becoming a client. www.keys-mortgages.com

    I think some of the advice or thinking about auctions is backwards. Cart before the horse.
    If you attend an auction, if you have really done your homework, and if you win the bid at a price at or below your target then it must be a good deal for you. It really does not matter much what others are doing, who is over paying or anything else. It does not matter if most sell or if most do not sell. While you can never be completely certain of the condition of the property (buying as-is) the ability to find a bargain depends a lot on what you are prepared to pay and how well you do your homework.
    Do your homework and know what the property needs, what its value to you and given the circumstances, then submit a bid.
    Auctions are neither good or bad for finding a deal. The fact that something is sold at auction does not mean it is good or bad. The transaction circumstances will dictate the result, not the process of sale. Maybe having lots of naive bidders in the room or too much interest in a property will push up the winning bid. Assuming you stop bidding at or before your target there is no financial risk.
    How time efficient actions are in terms of time invested vs. results is different than landing a bargain when you win the bid.
    0
    0

    John Corey 


    I host the London Real Estate Meet on the 2nd Tuesday of every month. 11 years and running. If you have never been before, email me for the 'new visitor' link.

    PropertyFortress.com/Events

    Also happy to chat on the phone. Pay It Forward; my way of giving back through sharing. Click on the link: AskJohn.AcuityScheduling.com to book a time. I will call you at the time you selected. Nothing to buy. Just be prepared with your questions so we can use the 20 minutes wisely.

    Personally, I love buying at auction. I like the thrill of getting a bargain and enjoy doing refurbishment projects. There are only 5 tips I would pass on to anyone thinking of buying at auction:
    1. Always view the property before bidding.
    2. Read the legal pack carefully
    3. Set yourself a limit and never exceed it
    4. Make sure you've got the money ready
    5. Don't raise your catalogue unless you are bidding!
    All of this seems fairly obvious but even the most experienced investors do not always follow these rules. Time and time again, nasty surprises can emerge such as cracks in the wall, the sewage farm at the end of the road, paying the seller's fees in the legal pack, finding the property is unmortgagable etc. The list goes on.
    There is usually some reason why a property is in an auction rather than a private treaty sale and its up to the bidder to find out why. The auctioneer or seller's solicitors wont tell you where the catch is.
    'Making Money From Property' by Martin Roberts from Homes Under The Hammer is a good read on the subject. Martin has seen hundreds of auction properties and talks about many of the pitfalls in his book.
    Allsop, Savills and Barnard Marcus are the best auctions to go to in London and there are many good regional auctions as well. I've managed to pursuade my solicitor to cast her eye over the legal pack for nothing! So always worth asking.
    Adrian Standing
    https://www.juniperproperty.com
    0
    0
    OMG I have to say I LOVE buying at auction - every house I own - bar one - has come from auction. I love auctions. I love the simplicity of the buying process, the viewing process and I have met some great people there who have taught me so much!
    I think Adrian has given such wise tips - and I would agree with all of it.
    The original question asked about:
    "Do you think its best to bid early, later or it makes no difference"
    Personally I wait till the very end [as a very experienced property investor taught me - do not fan the fire [i.e when you bid early you are just pushing up the price]. This may mean on some occasions you do not get to bid as the price has already gone past your budget. But that's ok - as another very wealthy and experienced investor has taught me - there is always another house. Honestly there is. It doesn't matter how good the deal/ how much you loved it. There is another house around the corner.
    "Buy before or after the auction?"
    If you really like the house and can make the deal stack up and believe you can get it for a good price before auction then go for it. Me - I just wait till auction night, there are normally a few I like and I am so strict on sticking to budgets that I just for those that fit the bill. You have to be really objective about this. It's an investment vehicle. You can buy some good stuff after auction, but lenders nowadays are more choosy and are not budging much on their reserve price. If you do buy after auction PLEASE make sure you have seen the property and read the legals. Just because something sounds cheap does not mean it is. If it sounds too good to be true it normally is. Bargains at auctions are normally properties which get overlooked, remember these are shrewd investors who buy at auctions and they are like hawks! You can also overpay at auction - more than it's market worth - so don't think it's just the cheap stuff at auction.

    "What time of the year at auction do you find less buyers i.e Christmas"
    Christmas is a good time - but personally I think almost every auction has a gem where somebody got a bargain - as I say the trick is uncovering that property. Think of it like gold panning - you got to sift through a lof of dirt before you find the gold Smile
    Hope that helps
    Thanks
    Sam
    https://www.VirtualLetz.com follow me on twitter @VirtualLetz
    0
    0
    And i've just got to add - at auction there is just so much variety - where else can you buy a pub in Burnley with planning permission for houses in the carpark to a huge townhouse in Germany!
    https://www.pattinsonauctions.co.uk/Prope...rty=104356
    https://www.VirtualLetz.com follow me on Twitter @Virtualletz.com
    0
    0
    I'd have to think twice if that price was for the entire building!!

    Samantha Collett said:
    Oh and you also get dogs like this - anybody for a flat?
    0
    0

    Lisa All comments are for education and information purposes only and do not construe as advice or a financial promotion. No liability is accepted for comments made. If you wish to receive information in an advisory capacity then please contact me about becoming a client. www.keys-mortgages.com