I was looking at a cheap property fairly near me at the auction recently as an investment. It was a pretty rough place, guide price of £15k+ although I thought it would go for around £40-45k. It's got a cool virtual tour of the place if you take a minute to look around:
https://www.bondwolfeauctions.com/properties/125611-property-auction-bootle/
I did my research and a house in the same terrace was sold in June 2020 in good condition for £60k.
Also, in looking at the legal pack the buyer was to pay all the seller's costs (£2k), and an £8k "Buyer's premium"... so well over £10k in charges on top of the bid price.
I know house prices are going up fast this year, but in my view the bidding went crazy - it sold for £58k... so best part of £70k when you add in all the various add-on costs.
This place a couple of streets over is basically the same house, and is fully done up and on the market for £80k: https://www.rightmove.co.uk/properties/84675139#/
I can only think that the bidders either:
In my view, that auction house property would need at least £10k (probably 15k) to bring it up to the quality of the other property that's already done... so they buyer's taking a risk of unexpected problems, and spending more to end up at a loss.
Any other ideas/suggestions the auction went so high... perhaps it's just the "Homes Under the Hammer" affect
https://www.bondwolfeauctions.com/properties/125611-property-auction-bootle/
I did my research and a house in the same terrace was sold in June 2020 in good condition for £60k.
Also, in looking at the legal pack the buyer was to pay all the seller's costs (£2k), and an £8k "Buyer's premium"... so well over £10k in charges on top of the bid price.
I know house prices are going up fast this year, but in my view the bidding went crazy - it sold for £58k... so best part of £70k when you add in all the various add-on costs.
This place a couple of streets over is basically the same house, and is fully done up and on the market for £80k: https://www.rightmove.co.uk/properties/84675139#/
I can only think that the bidders either:
- Didn't do their research on the local property values
- Hadn't recognised the extra costs of £10k were there - the auction house have hidden them all in the various T&Cs,
- Got caught up in a bidding frenzy
- They REALLY wanted that exact property for personal reasons
- A combo of 1-4!
In my view, that auction house property would need at least £10k (probably 15k) to bring it up to the quality of the other property that's already done... so they buyer's taking a risk of unexpected problems, and spending more to end up at a loss.
Any other ideas/suggestions the auction went so high... perhaps it's just the "Homes Under the Hammer" affect