Bidding at online auction

K

KatieMay

Registered User
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I have read the thread about bidding in general, and understand the way auctions work. However this will be my first time to bid at an online auction.

I'm moving to a different part of the country soon and have seen a property I really like being sold by Bidx1. I've had a walk around look at it, though not viewed it inside or had it surveyed yet, but I understand it is in good order.

It is being sold by a bank/mortgage holder. It was a buy to let (not currently tenanted) and via a bit of local knowledge I know pretty much how much is owed on it. I realise that the AMV is a number off the top of someone's head, but this one seems very low indeed, though it would cover the lender comfortably. I'd certainly be prepared to pay a good bit more than the AMV.

A big part of me hates benefiting from someone else's trouble, and I am not really sure if I even want to go there on one level. But on another level I realise it's going be sold to someone one way or another and that someone might as well be me.

Are there any stats or results on what prices BidX1 properties sell at - on average - in comparison to the AMV? Is the reserve anything similar to the AMV or is the same as a standard auction where it can be wildly different?

Also, is it a good idea to do an automated bid - entering a top price you'll pay? I'm suspicious of this - it seems like giving the auctioneer a target and who know's who (if anyone) is actually bidding online.

I know in a live auction that sometimes a sudden big jump in bid can fend other bidders off sometimes, but my hunch is that here it might be better to creep it up - am I thinking about this right? Is there a strategy (aside from bidding this highest price!) that you'd recommend?
 
I have bought at auction previously, there are opportunities however these are less than they were, the result depends on how popular the property is, I've seen plenty of properties sell for up to 60% over AMV and others just getting there.

I would bid in small increments, give yourself a budget for repairs and don't let your heart rule your heads, study recent sales in your area.
 

Bidx1( formerly allsop) set very low reserves, lots usually beat reserves by 30 %, if they fail to beat the reserve its often a sign the title is problematic, occasionally the price was just too high but does not appear to be the case here going by what you say.

Don't worry about the fact the property was repossessed from someone else, for all you know, they made no effort to pay.

I'm inclined to advise you to get a solicitor to check title as title is often imperfect when it comes to these auctions but most solicitors by default advise not to buy unless everything is pure vanilla, this puts potential buyers off and leaves room for real discount deals. Banks often won't lend for properties with flawed titles and they will employ a solicitor to check so in my opinion,these kind of deals are best suited to cash buyers.

Pros and cons.
 
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KatieMay said:
Are there any stats or results on what prices BidX1 properties sell at - on average - in comparison to the AMV?
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You can view all previous auction results on their website. There is even a history of all bids on each.

Don't use the minimum reserve as any form of a guide. You'll see property failing to reach reserve, sell for exactly reserve, or making 4 times the reserve. Without knowing the specific circumstances of each, it's difficult to draw any conclusions.

My advice is ignore the reserve, and do your own independent research to arrive with a valuation.

Also, be prepared for the actual process. Because it's online there are rigid rules. You can't start budding below reserve. They also set the amount your bid increases by.
 
Thank you, that's all very helpful. I hadn't realised all the results were online, and the bids. Very illuminating looking through them - they vary so much that there is clearly no pattern at all and it's down to interest. I would be a cash buyer. I do intend to have a solicitor look at the documents. I asked him about it (legals not available yet) and he just sighed and said he hates these online auctions, always problems of some kind. So there is that.

I was not aware that they set the amount your bid increases by. I've never bid at a property auction of any kind, though have bid at other types of auction. This seems a good deal different than an ordinary auction.So does it come up on the screen? Like, a button saying 'Bid 1000' or whatever? Or is it a choice of possible bids or how exactly does it work?

Also I thought when it said (on daft) that the auction would be at 8am they meant my exact lot would be then, it now seems that's everything starts then. How quickly do they rattle through the lots? Is the 'closes' time given the time they expect the auction to end? How accurate do they expect that to be?
 

Most solicitors loose control of their bowells about anything which isn't pure vanilla, it's easier for them to tell you to run and like I said earlier thats why real bargains can be had.

Nothing cheap without some risk of course.

They don't set the bid any higher than a grand on top of the previous bid so I would not worry about that, if someone else has a pre auction max bid, as soon as you bid, the system will automatically reset another bid higher until the pre auction max is hit, another important point is if a bid is made in the final minute, the clock resets for another minute until only one bidder is left.
 
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Ok, I understand the bidding better now. Feel like I'm getting a grip on this. Yeah, solicitors get panicky. His big issue was with sitting tenants but local enquiries have revealed that while there was tenants till a few weeks ago, they got wind of the sale and left, and it's actually empty now.
 
"Most solicitors loose control of their bowells about anything which isn't pure vanilla, it's easier for them to tell you to run and like I said earlier thats why real bargains can be had."

This is pure, unadulterated rubbish.

NOTHING. IS. A. BARGAIN. WHERE. THE. TITLE. IS. UNMARKETABLE.

Some of the titles are fine. A lot are rubbish.


"Banks often won't lend for properties with flawed titles and they will employ a solicitor to check so in my opinion,these kind of deals are best suited to cash buyers."

These titles are only suitable for cash purchasers precisely because a bank won't lend on them. And its a bit late to be asking a bank for a loan after someone's bought at auction and is bound in.

mf
 
Here's what a 'bargain' looks like. Not an auction, but not too unlike the 'bargain' that you might see at auction, just the big issues are disclosed upfront.

Mixed commercial / residential. Gross yield 13.5% at current rents.
[broken link removed]

Now, what my solicitor might "loose control of their bowells about"
  • No fire certificate
  • No compliance certificate
  • Extra apartment with no planning
  • Rates arrears
I'd be worried if my solicitor didn't tell me to run a mile. As a cash buyer, something like this turning sour would hurt financially.

The real bargains ended 2 years ago. Anything that looks cheap now is either a headache, or a high risk investment.
 

Been dealing with solicitors for years and that's my experience, my sister works with Philip Lee, ultra cautious about everything
 
galway_blow_in said:
ultra cautious about everything
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.... isn't that why we employ solicitors? It's enough for the client to go off on a buying frenzy.

When I bought a holiday home a few years back, it took the best part of 6 months to sort titles, rights of access etc. The seller's solicitor would have closed within a month. It was my solicitor who insisted on being happy with everything 100% before he'd sign off on it.

It was the best six months I waited. All my paperwork is in full order. I'm very appreciative of what he did and how he dealt with matters.
 
Bit of a minefield the whole business.

I'm not looking for some kind of an impossible sounding bargain, this is not a punt looking for profit, what I want is a place to live, possibly for the rest of my life. I am under no illusions either, this place will definitely go for well over the reserve, but even at twice the reserve it'd be worth it to me. I just have to hope that there are not too many others who think it's also worth that much (or more) to them. I can already see - extrapolating from the view counts on Daft - that I am not the only one interested.

I never saw myself bidding in an online auction - I sort of skipped over the Bidx1 listings mostly, but this one caught my eye. I have already spoken to my solicitor, as I said, and will certainly take his advice on the wisdom of the purchase.

Are you saying though that there can be issues like missing fire certs, lack of planning permission, and other serious stuff that would not even be flagged in the legal documents uploaded at Bidx1? Or would they flag them as uncertain - something like 'planning status unknown' - and then it's buyer beware and draw your own conclusions?
 
KatieMay said:
Are you saying though that there can be issues like missing fire certs, lack of planning permission, and other serious stuff that would not even be flagged in the legal documents uploaded at Bidx1?
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Apologies, I didn't mean to be alarmist: my comments were in relation to people thinking there are bargains at these auctions.
But yes, it is very much a case of buyer beware. For the majority, there is a reason they are being sold this route rather than conventional private treaty; whether issue with title or the borrower obstructing the sale.

If you are serious about it, you should invest money before the auction. Get a survey done, and ask about planning compliance. Get your solicitor to review the legal documents. It's an expensive exercise that's done after going sale agreed in a private treaty, but you must do up front in an auction as you sign a binding contract on the day.

By the way, there's nothing to stop you buying this before auction day either if you really want it.
 
Oh. I was not aware you could buy before auction. I'll look into that.

However I do intend to have all those items looked at before I buy, which is not that far in the future, so there probably is just about time to get that work done and then maybe not enough to buy early.

Probably part of the reason I view this as cheap looking is that I'm moving from a more expensive to a less expensive area of the country. But one I know quite well and I've been looking for the right place there - right for me - for some time so am familiar enough with the market.

I've been underbidder, not by much, at a few private treaty sales, where I thought the places were overvalued and was not prepared to pay more. But really they were probably not so much overvalued as just more 'right' for the people who bought them than they were for me. Like, a hundred people might flick past this one the list and think little of it, but it just so happens that it ticks pretty much all of my boxes so that makes it worth a lot more than the reserve to me.
 
By the way, there's nothing to stop you buying this before auction day either if you really want it.[/QUOTE]

I have tried this with Allsop and then BIDX1 and it did not work, apart from anything else with a distressed sale and a possible residual debt a lender if there is one will want to show that the market dictated the final price which is only right.

And there are bargains but to do well you need to be choosy, be in less desirable areas of the country and expect to spend money on upgrades and improvements, I made over €20k after costs but before CGT on an apartment I paid under €50k for two years before I sold it on to a willing buyer without agent involvement, that apartment had three bidders on it including myself and it went 25% over reserve on the day of sale but it still made sense.

The stars will never fully align, you could do all the homework you like and the oil burner could die the week after you move in costing you around €2k, do your best, do not get too excited and stick to your number.
 

There are degrees of awfulness when it comes to imperfect titles but solicitors tend to be queasy about any kind of minor flaw. I'm talking technical stuff which has no material consequence especially if you don't plan to sell the property again.
 
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