Auction buy - 20 days to complete - can it be done?
Discussion
There's a burned out house coming up for auction which I'm interested in but I've never bought at auction before.
The sellers pack includes extensive searches and there's a stipulation to pay 20% on the day of the auction and to complete within 20 business days.
I suspect I'm entering a minefield and am wondering what I need to prepare for and what I need to doing advance to ensure I can complete within 20 business days?
The hose has been derelict for a couple of years now and no longer on the council tax register.
I'd really appreciate any guidance or advice from anyone who has gone through anything like this before.
The sellers pack includes extensive searches and there's a stipulation to pay 20% on the day of the auction and to complete within 20 business days.
I suspect I'm entering a minefield and am wondering what I need to prepare for and what I need to doing advance to ensure I can complete within 20 business days?
The hose has been derelict for a couple of years now and no longer on the council tax register.
I'd really appreciate any guidance or advice from anyone who has gone through anything like this before.
Edited by Pistom on Sunday 1st December 12:04
Pistom said:
There's a burned out house coming up for auction which I'm interested in but I've never bought at auction before.
The sellers pack includes extensive searches and there's a stipulation to pay 20% on the day of the auction and to complete within 20 business days.
I suspect I'm entering a minefield and am wondering what I need to prepare for and what I need to doing advance to ensure I can complete within 20 business days?
The hose has been derelict for a couple of years now and no longer on the council tax register.
I'd really appreciate any guidance or advice from anyone who has gone through anything like this before.
If you've got cash to complete the mortgage and have a solicitor briefed and already looking at the legal pack then you should be fine.The sellers pack includes extensive searches and there's a stipulation to pay 20% on the day of the auction and to complete within 20 business days.
I suspect I'm entering a minefield and am wondering what I need to prepare for and what I need to doing advance to ensure I can complete within 20 business days?
The hose has been derelict for a couple of years now and no longer on the council tax register.
I'd really appreciate any guidance or advice from anyone who has gone through anything like this before.
Edited by Pistom on Sunday 1st December 12:04
If you need a mortgage then impossible.
Pistom said:
Yes - I should have said that I've got funds available. I wish it was just a case of transferring 100% of the payment on the day.
My concern is some jobsworth holding up proceedings which I've no control over.
If you are serious engage a solicitor - the legal pack and searches are provided upon registration.My concern is some jobsworth holding up proceedings which I've no control over.
bennno said:
If you are serious engage a solicitor - the legal pack and searches are provided upon registration.
Thank you. It only clicked with me over the weekend that I need to get the solicitor briefed as that's going to help hit the ground running. It helps when someone else confirms my thinking.
Many people buying at auction will be professionals, and the real work is done well before the hammer falls.
For example, as a minimum you’ll need to have:
Had a solicitor review the legal pack.
Engaged a planning consultant to provide advice on what’s likely to get planning as a replacement dwelling.
Taken advice on the likely value of what you’re going to build as this will define the plots value (and what you’ll be able to borrow).
Have the finance in place both to complete, and also to fund the rebuild…
For the inexperienced (and the experienced too, frankly) it’s high risk and not for the faint hearted, but it can land you a plot that might be rarely available on the normal open market.
I would say this, obviously, but seek professional advice.
For example, as a minimum you’ll need to have:
Had a solicitor review the legal pack.
Engaged a planning consultant to provide advice on what’s likely to get planning as a replacement dwelling.
Taken advice on the likely value of what you’re going to build as this will define the plots value (and what you’ll be able to borrow).
Have the finance in place both to complete, and also to fund the rebuild…
For the inexperienced (and the experienced too, frankly) it’s high risk and not for the faint hearted, but it can land you a plot that might be rarely available on the normal open market.
I would say this, obviously, but seek professional advice.
I purchased my house via auction last year with zero expirience.
I went in blind - as the property was only advertised a few days before the sale, but it was perfect for what we needed, so decided to take the risk.
Steep learning curve, the process is definitely geared towards investors or those who have the full amount in cash.
As we had already sold our old house and were living with my parents, we had about 50% of the hammer price cash, the rest was covered by a bridge loan (high interest), until we moved the property onto a traditional mortgage around 4 months after.
This was delayed due to land registry not updating for a period, we managed to expidite, however in order for the mortgage to take effect, we had to be the listed owners on land registry.
The auction house we used wanted 20% of the hammer price within three days, we were a few days overdue on completion which ended up costing us about £1.1k
In a nutshell, from my expirience;
- Line up a solicitor before the auction, chose a good one with a good reputation, pay good money as you will be relying on them to get it over the line. I couldnt take the risk of using smaller outfits. They will typically want a premium for completing auction purchases to a deadline.
- Read the smallprint thoroughly, we had strange expenses on the legal paperwork, which amounted to about £1k.
- Be available at all times for quick responses to emails, phone calls.etc - If my workplace werent so flexible with me needing to take 30 mins or so a day at random times, the sale would have fallen (I do ofcourse work over my alloted hours in any case)
- Ensure all paperwork is sent 1st class special delivery where possible - minimise the time anything spends in the postal network, as this costs valuable time on a short completion.
- If you are financing, make sure the lender is happy with a project / renovation. The house we purchased needed a full kit out as everything was original, however, I had to leave the sledge-hammer in the shed until the new mortgage went through.
If you need any pointers or have any questions, I'm happy to help sharing my expirience.
I went in blind - as the property was only advertised a few days before the sale, but it was perfect for what we needed, so decided to take the risk.
Steep learning curve, the process is definitely geared towards investors or those who have the full amount in cash.
As we had already sold our old house and were living with my parents, we had about 50% of the hammer price cash, the rest was covered by a bridge loan (high interest), until we moved the property onto a traditional mortgage around 4 months after.
This was delayed due to land registry not updating for a period, we managed to expidite, however in order for the mortgage to take effect, we had to be the listed owners on land registry.
The auction house we used wanted 20% of the hammer price within three days, we were a few days overdue on completion which ended up costing us about £1.1k
In a nutshell, from my expirience;
- Line up a solicitor before the auction, chose a good one with a good reputation, pay good money as you will be relying on them to get it over the line. I couldnt take the risk of using smaller outfits. They will typically want a premium for completing auction purchases to a deadline.
- Read the smallprint thoroughly, we had strange expenses on the legal paperwork, which amounted to about £1k.
- Be available at all times for quick responses to emails, phone calls.etc - If my workplace werent so flexible with me needing to take 30 mins or so a day at random times, the sale would have fallen (I do ofcourse work over my alloted hours in any case)
- Ensure all paperwork is sent 1st class special delivery where possible - minimise the time anything spends in the postal network, as this costs valuable time on a short completion.
- If you are financing, make sure the lender is happy with a project / renovation. The house we purchased needed a full kit out as everything was original, however, I had to leave the sledge-hammer in the shed until the new mortgage went through.
If you need any pointers or have any questions, I'm happy to help sharing my expirience.
Cow Corner said:
Many people buying at auction will be professionals, and the real work is done well before the hammer falls.
For example, as a minimum you’ll need to have:
Had a solicitor review the legal pack.
Engaged a planning consultant to provide advice on what’s likely to get planning as a replacement dwelling.
Taken advice on the likely value of what you’re going to build as this will define the plots value (and what you’ll be able to borrow).
Have the finance in place both to complete, and also to fund the rebuild…
For the inexperienced (and the experienced too, frankly) it’s high risk and not for the faint hearted, but it can land you a plot that might be rarely available on the normal open market.
I would say this, obviously, but seek professional advice.
Quite frankly, I've left all of this very late as initially, I wasn't very serious.For example, as a minimum you’ll need to have:
Had a solicitor review the legal pack.
Engaged a planning consultant to provide advice on what’s likely to get planning as a replacement dwelling.
Taken advice on the likely value of what you’re going to build as this will define the plots value (and what you’ll be able to borrow).
Have the finance in place both to complete, and also to fund the rebuild…
For the inexperienced (and the experienced too, frankly) it’s high risk and not for the faint hearted, but it can land you a plot that might be rarely available on the normal open market.
I would say this, obviously, but seek professional advice.
I felt that there will be so many bidding for this that it will sell for far above what is commercially viable but now I'm thinking, what if I've misjudged.
I'd kick myself if it sold for even within 50% of the guide price.
I probably shouldn't assume anything but I assumed that a 20 day completion date would be doable.
I've also assumed that as a minimum, the existing building could be rebuilt as was without any planning issues.
Thankfully, I have as much funding as I'm prepared to pay for it and as for rebuild costs - well, they're only really ever known once the job is done.
I think I will be onto solicitors in the morning as well as the local planning office.
Pistom said:
There's a burned out house coming up for auction which I'm interested in but I've never bought at auction before.
The sellers pack includes extensive searches and there's a stipulation to pay 20% on the day of the auction and to complete within 20 business days.
I suspect I'm entering a minefield and am wondering what I need to prepare for and what I need to doing advance to ensure I can complete within 20 business days?
The hose has been derelict for a couple of years now and no longer on the council tax register.
I'd really appreciate any guidance or advice from anyone who has gone through anything like this before.
Absolutely can be done, it's pretty normal for 20 business days. I've just bought a place via auction and it was exactly that.The sellers pack includes extensive searches and there's a stipulation to pay 20% on the day of the auction and to complete within 20 business days.
I suspect I'm entering a minefield and am wondering what I need to prepare for and what I need to doing advance to ensure I can complete within 20 business days?
The hose has been derelict for a couple of years now and no longer on the council tax register.
I'd really appreciate any guidance or advice from anyone who has gone through anything like this before.
Edited by Pistom on Sunday 1st December 12:04
What you need to understand is on the fall of the hammer contracts are exchanged, so its nothing like a normal purchase. You have to have done all your due diligence, have finance in place ready for winning, and a solicitor ready to go.
In my case the auction house wanted the name of my solicitor before I could even bid.
As you don’t wait for searches, surveys etc it can be done in a few weeks easily, my solicitor has done sales on the same day if everyone is on the ball. It will probably be cheaper to demolish the house, but it will be a slower process as it will involve more PP not just building control. You should be able to get VAT at 5% if its been empty for a long period or 0% if a new build.
Pistom said:
Quite frankly, I've left all of this very late as initially, I wasn't very serious.
I felt that there will be so many bidding for this that it will sell for far above what is commercially viable but now I'm thinking, what if I've misjudged.
I'd kick myself if it sold for even within 50% of the guide price.
I probably shouldn't assume anything but I assumed that a 20 day completion date would be doable.
I've also assumed that as a minimum, the existing building could be rebuilt as was without any planning issues.
Thankfully, I have as much funding as I'm prepared to pay for it and as for rebuild costs - well, they're only really ever known once the job is done.
I think I will be onto solicitors in the morning as well as the local planning office.
Quick response as rushing out...I felt that there will be so many bidding for this that it will sell for far above what is commercially viable but now I'm thinking, what if I've misjudged.
I'd kick myself if it sold for even within 50% of the guide price.
I probably shouldn't assume anything but I assumed that a 20 day completion date would be doable.
I've also assumed that as a minimum, the existing building could be rebuilt as was without any planning issues.
Thankfully, I have as much funding as I'm prepared to pay for it and as for rebuild costs - well, they're only really ever known once the job is done.
I think I will be onto solicitors in the morning as well as the local planning office.
20 day completion is not a target... it has to happen or will cost you lots of money (see my advice to get a solicitor on board now...).
The planning potential is crucial to its value - if it can be rebuilt with a similar house it will be worth X, if it can be rebuilt twice the size, or split into multiple plots, it will be worth X + n%...
No point in talking to the local authority, you won't have time to do a pre-app, you're going to need a planning consultant.
With respect, unless you have unlimited funds, the rebuild cost is absolutely critical, both for your affordability, but also to understand the plots value.
Once again, if serious, get onto relevant professionals on Monday morning.
Cow Corner said:
Quick response as rushing out...
PH at it's best - busy on a Sunday afternoon but still takes the time to share their knowledge.Thank you.
From my own knowledge of the planning authority and local policies, adding to what is there will be unlikely but in any case - my plan would be to either rebuild what's there or put a new building on the site. I've assumed that worst case that I rebuild what's there but I don't know if there would be restrictions attached to a rebuilt property over and above what was there before.
Pistom said:
Quite frankly, I've left all of this very late as initially, I wasn't very serious.
I felt that there will be so many bidding for this that it will sell for far above what is commercially viable but now I'm thinking, what if I've misjudged.
I'd kick myself if it sold for even within 50% of the guide price.
0n this point I follow a few auctions, and as above I bought at auction this year.I felt that there will be so many bidding for this that it will sell for far above what is commercially viable but now I'm thinking, what if I've misjudged.
I'd kick myself if it sold for even within 50% of the guide price.
Prices have been more realistic this year than in previous years, and many lots go unsold. I see properties in most auctions that I'd happily pay what they finally sell for. The place I bought was bang on guide. I expected it to go for 25% more and I would have paid that and still been happy.
Edited by 98elise on Sunday 1st December 18:14
Endure the completion moneys are in your solicitors client account a few days in advance. Gives you the opportunity to sort any delays.
The date stated on the auction is legally binding on the successful bidder. If you miss the completion date you will be liable for costs and possibly consequential loss.
The date stated on the auction is legally binding on the successful bidder. If you miss the completion date you will be liable for costs and possibly consequential loss.
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