Buying in an auction property that has a tenant in it

Discussion in 'Mortgages and buying and selling homes' started by Dazere, 9 Feb 2019.

  1. Dazere

    Dazere New Member


    Looking to buy a house on Bidx which has a tenant for over 5 years, but no lease details available at the moment (will try to get some).

    I'm buying with rebuild Ireland home loan.

    I'm renting a room myself so would be looking to move into the property as soon as I can.

    Any advise on where would I stand with the tenant situation?

    Anyone bought from an auction with a mortgage (not cash) before?

    Also, any recommendations on a solicitor who could review the legal documents ahead of the auction that wouldn't cost a fortune?

    Thanks for any help!
  2. llgon

    llgon Frequent Poster

    I have bought at auction but not with a mortgage. Here are a few points to bear in mind:

    Buying at auction carries more risks particularly if you are inexperienced in the area. If you are successful at auction you will have made a binding unconditional contract to purchase the property regardless of anything you might find out afterwards.

    You may not be able to get any detail regarding the lease/tenant prior to the auction.

    Has your local authority confirmed your home loan and indicated they are happy for you to purchase at auction? A condition of these loans is that you are going to be an owner occupier. If there is a tenant in situ at the outset it is difficult to see how you can meet this condition.

    If you are lucky the tenant will happily leave the property but you will need to give minimum 20 weeks notice. There is no guarantee they will leave.

    Presumably you are looking to bid in the auction on 20th February. You will do well to find a solicitor who will look through all the paperwork and do searches by then. I don't think you'll be able to be too choosy about their cost.

    You probably also need to arrange a survey before the 20th. If you are unsuccessful at auction you will be out of pocket for legal and surveyor's fees. Properties in these auctions can sell for figures much bigger than their reserves.

    You need a minimum €4,500 clear funds preauthorised by bank transfer or card to bid in the auction.

    If you are going to bid you need to be certain the property is for you, the legal documents are in order and that your mortgage will be given. You also need to be prepared for the fact that you could have a battle ahead to get the tenant out.
  3. Dazere

    Dazere New Member

    Thank you llgon for your response.

    Did you have any issues when you purchased your property through the auction?

    Did you find that the agents selling where helpful and you could rely on the information they provided verbally? Generally, I found that in some viewings the information I was told was very inaccurate to say the least when looking into it afterwards.

    I know the situation isn't ideal. But taking into consideration the market, there are very few properties that are in my price range. While I know it can go for a higher amount than advertising, I still have a chance. So I am trying to weigh out the possible risks and if it is worth it.
  4. RETIRED2017

    RETIRED2017 Frequent Poster

    Last edited: 10 Feb 2019
    It is possible to pick up property at or lower price than BEDX1 auctions , I know of property which could be bought for less than final price on BIDX1 Auctions,
    BIDX1 has helped increased prices in some areas,
    Last edited: 10 Feb 2019
  5. llgon

    llgon Frequent Poster

    My purchase did not cause any unforeseen issues, however as mentioned there was no mortgage involved and I already had some experience in property. The agents were Allsops who subsequently changed to Bidx1.
    The only information you can rely on are the legal documents available on their website beforehand. I got no extra information from them verbally, if I had I wouldn't have been relying on it.

    You would need to move quickly to ensure your mortgage is confirmed and solicitor and surveyor have done a their work prior to the auction. If all of these are clear go ahead and bid. If not I wouldn't recommend it.
    RETIRED2017 and RedOnion like this.
  6. RedOnion

    RedOnion Frequent Poster

    This is the key to OP.

    These auctions are generally not suited to a purchaser who needs a mortgage. You are not buying 'subject to mortgage', so you must be able to complete.
    So you need to get a solicitor to review title documents, and contract. You will need vacant possession to get a mortgage.
    Get your building survey done.
    Apply for mortgage approval for specific property, and have valuation done.

    All before the auction.

    And to complicate matters, you're using a rebuild Ireland home loan, rather than a bank mortgage.

    In the circumstances, I suspect a solicitor would advise against it.
    llgon and RETIRED2017 like this.
  7. Dazere

    Dazere New Member

    Thank you all. Your advises are much appreciated. Seems like it will be a no-go for me. I will call the city council to clarify, but I believe that they wont be approving of this one.

    Any tips on finding these properties and that there isn't a 'catch'? I'm learning that if the price is too good to be true, it normally is.