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I viewed a house on Tuesday which was in the Bigwoods Villa Park Auction on Wednesday. The guideprice was £45k. A blind man could see that it was going to go for around £115k. I have two houses in the same road. Buried in the legal pack was also a clause saying that the buyer had to pay the legal fees of the seller - £8k plus VAT. That's some legal fee. The viewing was full of people muttering about getting it for £60k. On the day it went for £114k.
The house is worth about £165k in an average condition. It was in an appalling condition. I reckon it's a £50k job for a builder to do himself. Or an £80k job to employ a builder.
Add that lot together - £114k plus £8k plus say £50k which comes to £172k, plus SDLT plus holding costs while you do it which is another £10k and you need to sell it for £182k to break even. If you do a really good job that's just about possible. But where's the profit?
(*Moderator note: Content removed*).
Was with you all the way until I read that last sentence. (*Moderator note: Sentence referred to was removed*).
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Having just watched the video about how the guide price has to be within 10% of the reserve price, why was this not sold at the auction?
Looked at that with interest, nice new tactic from Bigwoods on Guide Prices to state " in excess of £50k" not seen that before, makes a bit of a mockery of Guide Price next we will have "in excess of 50p!!!"
I assume you removed my comment about cash rich balti house owners because you consider it racist? I was merely quoting one of my closest Sikh friends. A little over sensitive perhaps?
Interesting thread here and the question of Guide Prices comes up all the time. It is correct that the reserve should not be more than 10% of the guide and that the guide is only an indication of where the reserve is currently set, and is not a valuation or what the auctioneer necessarily expects to sell it for. There is a caveat here in that whilst the catalogue is released with guide prices, they are subject to change and some vendors will hike the reserves up as late as the morning of the sale and the auctioneer has to then either decide to withdraw the lot or offer it at the higher reserve price and some prospective purchasers may not be aware of the change. This can be quite common place and can lead to situations mentioned above. I hope this helps.
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SDL sure do seem to have rotten luck then as all of the vendors seem to do it !! Poor SDL sure have busy auction mornings with all vendors changing the reserve
Perhaps some one purchased the property to live in. Not everyone goes to auctions to buy to rent or develop for a profit. Therefore paying a bit more was probably well worth it for themselves. I go to antique auctions alot and can always out bid the dealers as I want the item for myself not to trade on.