Buying at Auction - property issues

BrandNewToThis

Hi Folks, I’m new to boards so be kind.
I’ve searched other posts but non cover this.

I am looking at buying at house that’s currently vacant (7 years) and is owned by a receiver. It is being sold by an estate agent and more recently been put up onto online auction.
So here’s the details - receiver/bank owned. Vacant for 7 years. Has boundary issues and building regulations breaches. Also does not have planning for 70% of the property. It’s a cash only purchase.
I’ve been looking at this house since March 2020.
The agent has been reluctant to give information since day one as they’ve been trying to sell it for years. So it has been like pulling teeth getting information. So I spoke to neighbours on either side and did my research online.
Long story short - the sale was taken over by an online auction company who seemed to be extremely pushy and not forthcoming with information.
It went up online in July for 330k and no one bid. The online auction guy was pushing me to bid before hand and said it would go all day long between 400-500k.
Given all the issues it has I don’t think it’s worth 330k. It’s a detached house in the countryside. It’s a cottage renovation with extension and no planning for 70% of it.
It has buiilding regulation breaches and boundary issues.
The online auction guy called me two days after the auction to say someone had a binding bid of 340k and did I want to bid more. I said it wasn’t worth 340k under its current conditions and to go ahead. He emailed me a week later to say the binding bidder had disappeared and did I want to bid. So here’s the game - did someone bid 340? After no one had bid 330 online? Did someone throw away 10k in their binding bid ?
I’m struggling to get the truth from the agent and the online auction company. Both tell conflicting stories and say there are bids but none seem to get accepted by the receiver/bank. Also when a bid does go to the bank - it takes weeks for a reply from them.
Can anyone advise me on this?
Anyone had any experience with this type of property?
What is it really worth given all the issues - no planning, building breaches, boundary problems, laying vacant....

Thanks in advance

DubCount

This has been vacant for 7 years for good reason. You have planning permission issues, building regulation issues and boundary issues.

Most Estate Agents I have come across, are honest brokers, and if you are told there was a bid, I would not doubt it. However, 330k is not a small amount of money. If it was me, I'd be looking for something else that doesn't have the problems. My guess, this could be another 7 years vacant before they find a unicorn buyer with 330k cash and the legal/building expert knowledge to solve the problems.

DubCount

DubCount wrote: »

This has been vacant for 7 years for good reason. You have planning permission issues, building regulation issues and boundary issues.

Most Estate Agents I have come across, are honest brokers, and if you are told there was a bid, I would not doubt it. However, 330k is not a small amount of money. If it was me, I'd be looking for something else that doesn't have the problems. My guess, this could be another 7 years vacant before they find a unicorn buyer with 330k cash and the legal/building expert knowledge to solve the problems.

Isn’t there a statute of limitations after which the CoCo can do little about a building erected without proper planning?

Low Energy Eng

Why don't you just offer what you think it's worth.

BrandNewToThis

Dav010 wrote: »

Isn’t there a statute of limitations after which the CoCo can do little about a building erected without proper planning?

Yeah, if it’s there 7 years or so, it cannot be removed. So you apply for retention. I’ve looked into this and the building control issues. They’re all solvable and doable. I’m looking to live in it. Not flip it or anything. I just felt that the agent and the auction agent had different stories.
I agree in what you’re saying - it’s vacant for a reason but I’m willing and able to see past it and get it fixed.
I’ve been able to make an agreement in principle with the neighbour over the boundary issue.
I just don’t know what the reserve price is and anything I offer doesn’t get a reply.
So do they want to sell? Do they want more?

BrandNewToThis

Low Energy Eng wrote: »

Why don't you just offer what you think it's worth.

I have done and I’ve offered them what they wanted.
Then all of a sudden another bidder comes out of no where and 10k comes on. But then it never sells.

Deub

Just go with the price you have in mind and wait.
You could wait for a while though.

DubCount

BrandNewToThis wrote: »

I have done and I’ve offered them what they wanted.
Then all of a sudden another bidder comes out of no where and 10k comes on. But then it never sells.

Put in your offer and say its valid until x date. If its not accepted by x date, be prepared to walk away.

BrandNewToThis

Deub wrote: »

Just go with the price you have in mind and wait.
You could wait for a while though.

I just don’t get why they don’t want to sell it.
From speaking to local neighbours they’ve had people enquiring about it for years. All have been given the same run around from the estate agent. Lack of interest to sell it.
You would think having it for sale for 7 years and someone wanting to buy it for asking price, you’d sell it!

BrandNewToThis

DubCount wrote: »

Put in your offer and say its valid until x date. If its not accepted by x date, be prepared to walk away.

I agree with you. There has to be a walk away point in time.

Unless this property is somewhere that is very desirable, 4-500k is a huge amount for what could be a site with a boundary issue. Having done a quick search on the 7 yr rule, this applies to planning, but does not apply to a structure which doesn’t meet building regulations. When you say “auction”, this usually implies there is a time limit for bids, if you think it is worth no more than what you have bid, and you are a cash buyer, I’d be putting a bit of pressure on the seller to make their mind up now or risk you using your cash to buy somewhere else.

Personally I wouldn’t put a time limit on it unless you are certain you are done with it after that date.

BrandNewToThis

Dav010 wrote: »

Unless this property is somewhere that is very desirable, 4-500k is a huge amount for what could be a site with a boundary issue. Having done a quick search on the 7 yr rule, this applies to planning, but does not apply to a structure which doesn’t meet building regulations. When you say “auction”, this usually implies there is a time limit for bids, if you think it is worth no more than what you have bid, and you are a cash buyer, I’d be putting a bit of pressure on the seller to make their mind up now or risk you using your cash to buy somewhere else.

Yeah I’ve done that. I’ve asked them for replies on my bids and updates. I’ve received no replies or calls back and then maybe 5-6 weeks later I get an email out of the blue being told I was outbid but that the higher bid was declined by the receiver/bank. Yet it’s the first I hear of it.
Then the agent and auction company have different stories on the amount.

The CoCo can send an enforcement order to rectify building errors if they’re aware of them. The planning issues you have to apply for retention permission to the County council. They may approve and ask for a ‘donation’ to the locality. I’ve no issue with this. It’s doable.
As a bench mark, a similar sized property with more land went for sale starting at 350k in September 2019. It sold for 400k. No issues. So taking this one with all its issues - is it even worth 330k?

BrandNewToThis

BrandNewToThis wrote: »

Yeah I’ve done that. I’ve asked them for replies on my bids and updates. I’ve received no replies or calls back and then maybe 5-6 weeks later I get an email out of the blue being told I was outbid but that the higher bid was declined by the receiver/bank. Yet it’s the first I hear of it.
Then the agent and auction company have different stories on the amount.

The CoCo can send an enforcement order to rectify building errors if they’re aware of them. The planning issues you have to apply for retention permission to the County council. They may approve and ask for a ‘donation’ to the locality. I’ve no issue with this. It’s doable.
As a bench mark, a similar sized property with more land went for sale starting at 350k in September 2019. It sold for 400k. No issues. So taking this one with all its issues - is it even worth 330k?

Seems optimistic for a property on the market that long and with issues attached.

BrandNewToThis

Dav010 wrote: »

Seems optimistic for a property on the market that long and with issues attached.

So how do you broach that with the agent?
They know the issues yet won’t sell.
Is it them holding it or is it the receiver looking to get as much as possible for it?

SEPT 23 1989

Would a bank/receiver not want rid as quickly as possible if everything was in order?

What does your solicitor say?

BrandNewToThis

BrandNewToThis wrote: »

So how do you broach that with the agent?
They know the issues yet won’t sell.
Is it them holding it or is it the receiver looking to get as much as possible for it?

Unfortunately, to a reciever this is likely to be a folder in a drawer full of properties, there isn’t the same motivation to sell quickly in a lot of cases and communication can be painful, as you are finding. Not a lot you can do apart from keeping an eye out for other properties that might interest you.

What’s the story with the “auction” reference in the thread title? It seems this is just a standard listing if there isn’t a time limit for bids, as would be typical of an auction.

SEPT 23 1989

SEPT 23 1989 wrote: »

Would a bank/receiver not want rid as quickly as possible if everything was in order?

What does your solicitor say?

My experience is the opposite, receiver sales are slow.

BrandNewToThis

SEPT 23 1989 wrote: »

Would a bank/receiver not want rid as quickly as possible if everything was in order?

What does your solicitor say?

In theory the bank/receiver should want it gone ASAP but they don’t seem to. It’s sold as is and a cash sale. I genuinely think they just want more money for it.

Solicitor has said that as long as I am aware of the issues and if I’m ok with it then to proceed with caution.

BrandNewToThis

Dav010 wrote: »

Unfortunately, to a reciever this is likely to be a folder in a drawer full of properties, there isn’t the same motivation to sell quickly in a lot of cases and communication can be painful, as you are finding. Not a lot you can do apart from keeping an eye out for other properties that might interest you.

What’s the story with the “auction” reference in the thread title? It seems this is just a standard listing if there isn’t a time limit for bids, as would be typical of an auction.

Sorry - the ‘auction’ reference is that it was for sale with an agent and then supported by an online auction company. They’re selling it jointly now. The property was included in an auction online in July but it didn’t sell. Not a bid. Then a couple days later a bid came in 10k above the starting price. I’ve no experience with auction company’s but my experience of this particular crowd is that they were extremely pushy and using sales techniques to try to get me to bid higher.

BrandNewToThis

BrandNewToThis wrote: »

Sorry - the ‘auction’ reference is that it was for sale with an agent and then supported by an online auction company. They’re selling it jointly now. The property was included in an auction online in July but it didn’t sell. Not a bid. Then a couple days later a bid came in 10k above the starting price. I’ve no experience with auction company’s but my experience of this particular crowd is that they were extremely pushy and using sales techniques to try to get me to bid higher.

That’s what they are paid to do, they work for the seller, not the buyer.

I’d change the title, buying “at auction” is a completely different process.

BrandNewToThis

Dav010 wrote: »

My experience is the opposite, receiver sales are slow.

Why are they so slow?

BrandNewToThis

BrandNewToThis wrote: »

Why are they so slow?

I guess there is no attachment to the property, it’s just a file on their desk, and they don’t need the money like a typical seller might.

BrandNewToThis

Dav010 wrote: »

That’s what they are paid to do, they work for the seller, not the buyer.

Of course. And then more the sell it for the more commission they get. But given all the problems and the fact it’s been for sale for 7 years - do they think it’s worth more than the local selling prices ?
The auction guy said he’d get “400-500 at auction all day long”.... but not one person bid.
So does he still believe he’ll get that? Yeah maybe if there was nothing wrong and it was a straight sale.

Wildly Boaring

You've seen similar go for 400k locally as above?

Then it isn't worth the smell of 330k

A property empty for 7 years. Will cost money to put into use. How much, how long is the string.
Could be 5k for a lick of paint and some carpet.
Could be 100k for roof joists, plasterboard walls, ceiling, pipes, boiler....

You are correct. It is highly likely the council will grant pp. BUT you say it doesn't meeting building regs. How much? Like every ceiling too low, non-compliant velux windows and a stairs that doesn't fit?

Boundary issues. Ugh. I left the worst to last
Buying somewhere with boundary issues is my idea of hell.
The neighbours might let on like it's only a squabble because agrueing with the receiver is useless, once you buy they can start twisting the knife.
Is someone claiming an important bit, like the entrance or the percolation area or the whole bloody site?
Boundary issues are a balls to solve.
They either need to be agreed or you need to go to court.
Even if you align all the maps, engineers and solicitors you can find, if the other side won't conceed, court is your only solution.
Now say is a bit dodgy and they are claiming an important bit, like the enterance, and you lose in court.
300k plus 10k to go to court and you've a lovely useless moulding, rotting heap of ****e.


So yeah you need lots more info, you need a very thorough survey done (like check every timber for rot thorough). You need to know the importance of the boundary issue. You need to know the building reg issues.

You need to walk away from this "cheap" house unless theyre going to apply a real discount. Like 200k cash and take your massive risk.
The reason it's at "auction" is auction is cash only with no questions after the bid.

BrandNewToThis

Wildly Boaring wrote: »

You've seen similar go for 400k locally as above?

Then it isn't worth the smell of 330k

A property empty for 7 years. Will cost money to put into use. How much, how long is the string.
Could be 5k for a lick of paint and some carpet.
Could be 100k for roof joists, plasterboard walls, ceiling, pipes, boiler....

You are correct. It is highly likely the council will grant pp. BUT you say it doesn't meeting building regs. How much? Like every ceiling too low, non-compliant velux windows and a stairs that doesn't fit?

Boundary issues. Ugh. I left the worst to last
Buying somewhere with boundary issues is my idea of hell.
The neighbours might let on like it's only a squabble because agrueing with the receiver is useless, once you buy they can start twisting the knife.
Is someone claiming an important bit, like the entrance or the percolation area or the whole bloody site?
Boundary issues are a balls to solve.
They either need to be agreed or you need to go to court.
Even if you align all the maps, engineers and solicitors you can find, if the other side won't conceed, court is your only solution.
Now say is a bit dodgy and they are claiming an important bit, like the enterance, and you lose in court.
300k plus 10k to go to court and you've a lovely useless moulding, rotting heap of ****e.


So yeah you need lots more info, you need a very thorough survey done (like check every timber for rot thorough). You need to know the importance of the boundary issue. You need to know the building reg issues.

You need to walk away from this "cheap" house unless theyre going to apply a real discount. Like 200k cash and take your massive risk.
The reason it's at "auction" is auction is cash only with no questions after the bid.

You’re not the first to say this to me - everything you’ve said above has been outlined.
I haven’t been able to get a surveyor in due to Covid - the agent wouldn’t grant access. but it will be the first thing I do when I can. They’ve since taken it off the market as I believe the boundary issue is going to be sorted. Some paperwork is being submitted and it’ll sort the boundary issue or so we’ll see.
Yes, a similar sized property with more land went for 400k only last year. Literally two fields over from this one.
So given all the problems of building regulations etc you’d offer 200k or less? And if they don’t bite then walk away? Or do you think it’s worth getting a comprehensive survey pricing the issues to be repaired and seeing where we’re at then ?