House purchase by Modern Method of Auction
Discussion
Having accepted an offer on our current house we are looking to buy our next home and may well be interested in the below listed property
http://www.rightmove.co.uk/property-for-sale/prope...
Research suggests that the house has been on the market for a considerable time and prior being put subject of this 'modern auction' was offered for sale for £475k in 2015. Clearly, it did not sell at this time.
It is now to be sold via a "Modern Method of Auction" which is something I've never come across before.
The 'Guide Price' of £345k shown appears to be a starting price but it is also subject of an undisclosed 'reserve price' which is up to 10% higher. The purchaser must also pay a 'reservation fee' of 3.5% plus VAT to the auction house. The purchaser has to sign an agreement to exchange contracts within 28 days of the buyers' solicitors receiving a draft of the contract and then to complete within a further 28 days. There appears to be a 'buyers information package' already prepared containing all the necessary searches etc.
My concerns are:
If, for whatever reason the chain below us breaks down, or a survey throws up a serious problem and we need to withdraw from the purchase then we would lose the reservation fee.
I would also be concerned in case we would not be able to exchange and complete within the set period due to being at the mercy of solicitors or other members of 'the chain'.
Does anyone have any experience of this method of buying a house and have any words of wisdom for us? Thank you.
http://www.rightmove.co.uk/property-for-sale/prope...
Research suggests that the house has been on the market for a considerable time and prior being put subject of this 'modern auction' was offered for sale for £475k in 2015. Clearly, it did not sell at this time.
It is now to be sold via a "Modern Method of Auction" which is something I've never come across before.
The 'Guide Price' of £345k shown appears to be a starting price but it is also subject of an undisclosed 'reserve price' which is up to 10% higher. The purchaser must also pay a 'reservation fee' of 3.5% plus VAT to the auction house. The purchaser has to sign an agreement to exchange contracts within 28 days of the buyers' solicitors receiving a draft of the contract and then to complete within a further 28 days. There appears to be a 'buyers information package' already prepared containing all the necessary searches etc.
My concerns are:
If, for whatever reason the chain below us breaks down, or a survey throws up a serious problem and we need to withdraw from the purchase then we would lose the reservation fee.
I would also be concerned in case we would not be able to exchange and complete within the set period due to being at the mercy of solicitors or other members of 'the chain'.
Does anyone have any experience of this method of buying a house and have any words of wisdom for us? Thank you.
Edited by Rh14n on Friday 2nd December 23:45
Edited by Rh14n on Saturday 3rd December 00:50
Hmm... Thank you for your replies. I'm glad it's not just me who's very sceptical. The 'auction' day is pretty soon and I'm not that convinced that there's a huge amount of interest in it so the timing is quite convenient for us. If we do like it after viewing I'd be mindful to take Jobbo's advice, refuse to engage in the process and insist on a more traditional process.
Thank you. A bit of research on our part has established that it is subject of an Equity Release Scheme and that the occupier has undertaken what appears to be a failed business venture from the premises having spent quite a bit of money on it and presumably now just needs to move on. Perhaps these factors may go in our favour.
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