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Auction property: mortgage approved

  • 23-07-2016 9:01am
    #1
    Brioscai
    Registered Users, Registered Users 2 Posts: 52 ✭✭


    Can anyone help? So I'm mortgage approved, saw a house that is due to go for auction. I would be relying on a mortgage to complete. The house needs a good bit of work done to it, which would take several years.

    Is this ok or do you need permission from the bank beforehand? Total newbie any help appreciated I will of course ring the bank in advance, but just wondering is there anything else that I should be thinking of.


Comments

  • #2
    athtrasna
    Closed Accounts Posts: 13,420 ✭✭✭✭athtrasna


    Brioscai wrote: »
    Can anyone help? So I'm mortgage approved, saw a house that is due to go for auction. I would be relying on a mortgage to complete. The house needs a good bit of work done to it, which would take several years.

    Is this ok or do you need permission from the bank beforehand? Total newbie any help appreciated I will of course ring the bank in advance, but just wondering is there anything else that I should be thinking of.

    You need authorisation from the bank to bid, they should give you a letter which may include your maximum threshold, the auction house will look for this letter.


  • #3
    Brioscai
    Registered Users, Registered Users 2 Posts: 52 ✭✭Brioscai


    Thank you Athtrasna, that is very helpful.


  • #4
    davo10
    Closed Accounts Posts: 6,926 ✭✭✭davo10


    Brioscai wrote: »
    Thank you Athtrasna, that is very helpful.

    Op, bidding at auction can get you a bargain but there are very specific rules involved, in certain cases if your bid is accepted a contract is formed and you have to complete the purchase so do very careful research before you bid.


  • #5
    Brioscai
    Registered Users, Registered Users 2 Posts: 52 ✭✭Brioscai


    Thanks Davo10.


  • #6
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    Auctions are not for beginners. You would have to have the title checked by a solicitor beforehand and you will have to pay for it even if you don't secure the property. You will also have to carry out a survey and have a refurbishment plan approved by the bank. This will also have to be paid for even if you do not become the successful bidder. Many guide prices for auction are much lower than the eventual sale price . This is done as a marketing tactic so unless you are experienced you may find you are wasting money attempting to bid on houses you can't afford.
    Once the hammer falls there is deemed to be a contract and the 10% deposit is lost if you don't complete. You can also be sued for the difference if the property has to be sold at a lower price within a year.
    Under no circumstances should you bid on a house at auction and only then apply to the bank for funding.


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  • #7
    Brioscai
    Registered Users, Registered Users 2 Posts: 52 ✭✭Brioscai


    4ensic, that is a really comprehensive reply. Thank you.


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