House auctions

[Jin]

I am going to look at buying my first house this year and wondering if anyone has parents who have purchased a house from an auction before.

I want to know how reliable it is and whether I am likely to buy a crooked house without experience at auctions.

[Honesty:]

View the house before if possible. This will give you a good idea of the condition and possibly the price. Look on nethouseprices.com for similar size houses in the same street and see how much they they have sold for. Any in the last year would obviously be a good indication. If its over 2-3 years ago then look at property price trends for that specific type of house e.g. detached, semi-detached etc.
Find the reason as to why the person is selling too ... e.g. crime? Ask neighbours to see what the area is like. See if the same property has been sold before, if so, for how much?
I remembered the property price trends a year ago but unfortunately I cannot remember it right now. However a property which sold for £400,000 in 2001 is now worth around £500,000, so a 25% increase on a detached house. However, obviously the area has a great effect.

Prices are currently depressed still and sellers are finding it extremely difficult to sell at the moment, however at an auction I guess that isn't their concern. Using the data from previous sales, ask neighbours and only bid if you think its worth it. Don't bid without seeing the condition of the property.
If it isn't that great, just go to the estate agents, people will happily negotiate prices. Make a very low offer. Usually those who use estate agents happily reduce the price by 10%.

I had a dealing where the property was listed for £500,000. Placed a offer for £350,000 (low on purpose). The seller happily negotiated down to £425,000. Why? No one is buying.

Hope it helps. Just had a few drinks so I am sorry if I have repeated myself several times.

---------- Post added 27-01-2011 at 11:48 PM ----------

Oh and go to a few auctions first and see how people bid for houses, any tactics, might help you.

[Jin]

Interesting, so I take it that a list of houses to be auctioned are published by the auction house prior to the auction allowing people to check the properties?

[Honesty:]

Interesting, so I take it that a list of houses to be auctioned are published by the auction house prior to the auction allowing people to check the properties?

I was going to attend a property auction, but at the end I didn't as I found a suitable property. However, this one was allowing viewings, but not individually - they fixed a time for everyone to come see it at the same time.
Unfortunately as I never attended it, I do not know how they work so attending a few prior to the auction date might help - if that is possible.

Only tried to help you by giving you advice on how to ensure you do not pay more than the property is worth. Like I said, I would try estate agents too. However I know that some people get properties very cheap in auctions.

[Metric1]

I am going to look at buying my first house this year and wondering if anyone has parents who have purchased a house from an auction before.

I want to know how reliable it is and whether I am likely to buy a crooked house without experience at auctions.

This is my job! My mom is a real estate broker and she has a construction company that focuses on buying homes, fixing them and either renting them or selling them. We have purchased short-sales, foreclosures, bankruptcy homes, and one police seized home. To be honest, the homes at auction are probably going to be crooked. My mom bought a police seized property and it was used to grow marijuana, and the inside of it was ruined and it needed serious structural repairs and a completely new electrical system because the wires had been tapped, I think it was almost a break-even project when we were done with it.

You should try and get the auction list before you go to the auction and physically go to the house and check it out. We've gone so far as to talk to the neighbors and ask them if they know anything about the previous owners and whether or not they took care of the house and if they know anything about them. We've even gotten in touch with previous owners and they've been more than willing to tell us what we wanted to know. Also, watch out for unpaid taxes, they can be an unforeseen expense if they haven't been paid in a few years.

[Conservative,]

Although my family haven't, my Godfather does on a regular basis because he's a property developer (in his spare time lol).

Basically, as the others have said - go and check out the property first. NEVER buy without seeing it. For all you know you could be paying £400,000 for a tiny cottage with mould everywhere.

Check the property listings and check out any properties you're interested in. if you're able to, look around the house, maybe with a friend so you can point out the goods and bads to each other - 2 sets of eyes and 2 brains are better than 1. As also stated, check with the neighbours about the area...is it nice? What's the crime rate? Why do they think they'd be selling? Etc.

Often it is reliable, and you can get bargains, but never buy without seeing first. If you've checked the house out, found nothing wrong with it, got all your info you like, then set yourself a budget. Maybe find out what their asking price/reserve is on it and then limit yourself to a certain amount around that area.

Oh, and never bid early - always bid when it seems like people have stopped bidding. But in general, they're fairly reliable as long as you check the property to make sure it's what it says on the tin.