Anyone bought a property at auction? Can't work out why this house went for this money...

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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:
  1. Didn't do their research on the local property values
  2. Hadn't recognised the extra costs of £10k were there - the auction house have hidden them all in the various T&Cs,
  3. Got caught up in a bidding frenzy
  4. They REALLY wanted that exact property for personal reasons
  5. A combo of 1-4!
Otherwise I can't fathom how anyone could think that's a good investment!?

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 :D
 
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probably as you suspect a combination of all 1-4 , I know someone , wanted to live on a particular street and put a note through every door offered them £25K over asking price for all the properties on the road, that was in the late 80's during a slump in house prices, BUT they wanted to live on that street and particularly on one side of the road, and they did get one of the houses and are still there , it is a vey nice property to be fair - House was about £100-£120K market price (in middle 80's) , nice 4 bed detached , in a sought after area
 
I'd ignore the likes of homes under the hammer nonsense and the like. It is of course possible to make money on property development of course, but it's also possible to lose a fortune too.
 
My last two properties have been bought by relatives of the immediate neighbours. The first sale, coincidentally, ours and the neighbours house was on the market at the same time, and both houses were bought by two generations of the same family.
The most recent sale, we sold without even putting the house on the market. On that sale, we were approached a few years before being ready for a sale, but both us and the buyer expressed our mutual interest for the near future.
 
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If you own land be aware of the adverse possession laws

2 cases down this way in the past

one was were the local council lost a sizeable chunk of land
 
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I'm out of it now, but I seldom bought at auction, much preferring private negotiation or sealed bid.

It is extremely difficult to make £money on straight renovations, the properties where this is possible are sought after by very many & the competition drives up the prices to an extent where it's only really viable for owner occupiers looking to get more house for their money. Good luck to 'em, it seldom ends happily.

If you want to make £money developing & don't know where or how to start . . . It is the easiest thing to identify your local areas where the market is in demand & moves fast, keep a close eye on any upcoming properties for sale & an even closer eye on those which have room to extend.

Desireable areas are much sought after by professional & solvent couples, while the myth is she buys the kitchen & he buys the workshop/garage what they actually start out with at the top of the list is the number of bedrooms. If you can buy any 3 bed in that desireable area & extend it to a 4 bed then you can make money. 2 bed to 3 bed, 4 bed to 5 bed, it is difficult not to make £money

One of my first projects was a 3 bed in Southwell Notts, I lived in 1 room while demolishing the garage & sideways extending it to include garage & 1 extra bedroom with a small ensuite, in 5mths I made more profit than the bricklayer made in 2yrs . . . He partnered up with me on the next 10+ projects.

Good luck. It's damned hard work being this lucky.
 
An auction property that intrigued me was the public toilet in Charlestown. It fell into disrepair and the council closed it down. Directly outside was the public footpath/coastal path then a small green area about twenty feet deep with a bench, eventually the council fenced off the green area and removed the bench because of erosion, it literally was on a cliff edge.

A building company offered to refurbish the building at no cost so the council carried out a survey and decided it was unsafe because of erosion, the building company constructed a new toilet fee in the car park, (20p entrance fee but in the summer it's quite easy to loiter for a few minutes and slip in behind a German tourist) and the old toilet was put to auction with a guide price of 75K, some daft bird chased the price up to 115K but what I can't understand is that the council, who had previously deemed it unsafe, gave her planning permission to convert it to a two story dwelling.

The bird, if nothing else is a good self publicist and the build featured on a tv programme, 'amazing spaces', the work was carried out to a poor standard and at the end she put it on the market for 600K, I know Charlestown well and I would estimate at that time 300K value would be pushing it.

Eventually it was taken off the market and the bird claimed that because she'd fallen in love with the property, and Charlestown, she couldn't bear to part with it and decided to rent it out as a holiday let, the fact is she couldn't give it away.

I've not been down there this year and wont until the Rashleigh Arms and the Pier House Hotel resume the sale of fine ales, but when I looked last year a portion of the garden had fallen away and the fence was hanging in mid air and one side of the footpath was closed. I'd give it 5 years max before the house disappears.

Charlotte Thomson converts old public toilets into new £600k home in Charlestown | Daily Mail Online
 
I'm very keen to do this year.
But nervous if I could make money or not.

A house a few doors away will be on the market soon. It will be a total refurbishment.
New roof as well.

I converted mine from 2 to 3 bed and a new wet room.
I'd do the same but wonder if I could use my drawings with a clever bit of editing.

Not sure I'd have the confidence going to Auction
 
As a general rule are auctions considered too risky?
 
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I'm very keen to do this year. But nervous if I could make money or not. A house a few doors away will be on the market soon. It will be a total refurbishment.
New roof as well. I converted mine from 2 to 3 bed and a new wet room. I'd do the same but wonder if I could use my drawings with a clever bit of editing. Not sure I'd have the confidence going to Auction
You'd stand the best chance as a builder who can do a large portion of the work yourself and have good tradesman to help when needed as well
 
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There are a few real reasons why a property might end up in a public auction, but take this as a general rule, they usually aren't worth bothering with.
 
I'm very keen to do this year.
But nervous if I could make money or not.

A house a few doors away will be on the market soon. It will be a total refurbishment.
New roof as well.

I converted mine from 2 to 3 bed and a new wet room.
I'd do the same but wonder if I could use my drawings with a clever bit of editing.

Not sure I'd have the confidence going to Auction
No one is better placed to know the costs for that particular place that you if you've already done one the same. Auction is a risky game and obviously you need the money up front...no mortgages!
 
My big Sis' thought she would jump on the bandwagon in the late 90's & set out to become the next Sarah Beeny.

I tried my utmost to help, steer & guide her, but she knows best & never listened . . . .

She bought a mid terrace, 2 up 2 down with a nasty kitchen & bathroom extension into the backyard. Bought it for £9k, spent £20k+ to renovate (to her standards) & put a tenant in who promptly wrecked it.

She sold it after 3yrs for £30k . . . . The market had moved sooo much in that 2yrs I reckon the original £9k property would easily have fetch'd £25k.
 
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