The Lemon Fool

How important is it to attend an auction when buying a house at auction. I want to bid on a place but have a family event the day before.

Hi I have bought at action before, though some time ago and circs. may have changed, I offer the following:
If you have viewed the property and are content with condition etc, have appointed a solicitor and have the funds in place(ISTR that you need to place a 10% deposit, more or less immediately and complete within 28 days)then, either leaving a bid with the auctioneers or appointing a proxy is OK.

The property I bought was a building society repo and on arrival at the auction there was an info pack, which to my surprise showed that there were 4 outstanding mortgages on the property!A hasty phone call to my solicitor confirmed that this was not an issue to the purchaser(ie me) but that an heirarchy existed for the allocation of whatever proceeds the sale made and no liability existed for the purchaser, but you/your proxy should confirm that no new information about the property is made available on the day.
The other factor is that being there gives you a feel for how committed the competition is- if the bidding slows , or the increments reduce as you near your personal limit , it may be a sign that another small increment will win the deal, there is a certain amount of "poker" in the bidding process and seeing the opposition is a help.
Guide prices are of dubious relevance, I am aware of in stances in which guide prices are set below the reserve, so recognise that to clinch the buy you may have to be prepared to exceed the guide and that a good knowledge of typical prices, in the area and depending upon condition is essential.
A suspicion I have is that certain regular buyers get a bit of help from the auctioneer, ie that some of those there on the day are "made aware" by word or gesture as to the upper limit of bids "on the book",so you might find yourself outbid by a fraction of the total price.


hope this helps
casa

casapinos wrote:Hi I have bought at action before, though some time ago and circs. may have changed, I offer the following:
If you have viewed the property and are content with condition etc, have appointed a solicitor and have the funds in place(ISTR that you need to place a 10% deposit, more or less immediately and complete within 28 days)then, either leaving a bid with the auctioneers or appointing a proxy is OK.

The property I bought was a building society repo and on arrival at the auction there was an info pack, which to my surprise showed that there were 4 outstanding mortgages on the property!A hasty phone call to my solicitor confirmed that this was not an issue to the purchaser(ie me) but that an heirarchy existed for the allocation of whatever proceeds the sale made and no liability existed for the purchaser, but you/your proxy should confirm that no new information about the property is made available on the day.
The other factor is that being there gives you a feel for how committed the competition is- if the bidding slows , or the increments reduce as you near your personal limit , it may be a sign that another small increment will win the deal, there is a certain amount of "poker" in the bidding process and seeing the opposition is a help.
Guide prices are of dubious relevance, I am aware of in stances in which guide prices are set below the reserve, so recognise that to clinch the buy you may have to be prepared to exceed the guide and that a good knowledge of typical prices, in the area and depending upon condition is essential.
A suspicion I have is that certain regular buyers get a bit of help from the auctioneer, ie that some of those there on the day are "made aware" by word or gesture as to the upper limit of bids "on the book",so you might find yourself outbid by a fraction of the total price.


hope this helps
casa

Thanks for the reply casa.

The situation has changed a little and I can bid in person. I'll let you know how I get on.

A suspicion I have is that certain regular buyers get a bit of help from the auctioneer, ie that some of those there on the day are "made aware" by word or gesture as to the upper limit of bids "on the book",so you might find yourself outbid by a fraction of the total price.

Experienced buyers also get a lot of help from auctioneers/sellers. On some lots, the auction catalogue will state 'by order of xxx' or such like. Where 'xxx' is the name of the actual seller, (as distinct from by order of executors or receivers) whether a good idea to buy from xxx depends upon your knowledge of xxx.

In a matter I'm involved with, a high street shop let to a multiple retailer. the catalogue stated by order of 'abc' which I know to be a very shrewd property trading company. The buyer, inexperienced, overpaid and has been stuck with a situation where the rent hasn't increased in more than 15 years and when the lease expires the rent will be lower.