I am trying to figure out my possibilities as a first-time buyer of a property in the commuter Galway area. I am reading as much as I can about procedures and approaches to the mortgage and property market. I already visited a few properties. My budget is very meagre and tight as I'm applying by myself. I'm doing all the recommended steps, I believe; saving money weekly, I have my 20% deposit and I already obtained my Approval in principle.
I was trying to register in one of these EA auction websites to participate in an auction. The house being sold, in particular, was meeting my criteria. The problem was that to even register, I needed to have a solicitor's name. Is it normal? I would like to attend an auction to see how it is done. And, of course, if I had a chance at it, I would bid. Is that the general rule for all auctioneers out there? Do I need to have a solicitor before knowing if I have a chance? And also, is that not then prohibitively expensive?
There are lots of threads on bidding at auctions, they are worth a read before you participate.
You need to understand a few very important points about auctions.
• Many of the properties have problem titles which make them extremely difficult to get mortgages for.
• Many are being sold by Receivers which means the Receivers are not bound my the same obligations that typical sellers are. They are not obliged to give certain assurances about the property.
• At auction, the contract is formed when the hammer drops, the property is yours, warts and all. You sign a contract and pay a sizeable deposit on the day. If you pull out after that, or the bank refuses drawdown of the mortgage due to problems with the title, you lose all your deposit which might be 5-15% of the auction sale price.
• It is up to you to do the survey/legal search BEFORE the auction as it will be to late after your bid has been accepted.
• You really need a SPAR (solicitors pre auction report) on the property before you bid, this will cost you.
• Auctions are exciting, you can get caught up in the bidding and end up paying more than you intended, each bid is “only a thousand more” than the last one.
All in all, auctions are not for the uninitiated or inexperienced. A lot of bidders are cash investors who know what they are doing. So if you sign up online (you have to pay to register and pay a deposit if you want to bid on a particular property), make sure you do your research, it will be too late if you realise you have made a big mistake, after your bid is accepted, unlike a private treaty sale where a deposit is fully refundable up until the contracts are signed, you can lose your shirt at an auction.
All very good advice there....especially " not for the uninitiated inexperienced" part.
Being Frank, OP, it's not a good road to go down as it's your first 'rung' of the ladder so to speak....."caveat emptor" has a whole different definition for 'auction' buys
and on w
auctions in many ( if not most ) cases are not providing anymore value than conventional private sales at the moment
So a bit like a few years ago when everyone was buying cars at auctions because they are "great value" and the buyers ended up paying retail prices for auctioned cars.
Auctions did provide bargain opportunities as recently as perhaps three years ago but not now bar situations where an extremely belligerent debtor is lurking in the background
I know someone who bought an apartment in 2019 and had goons come to their home on behalf of guy who lost the joint
They got their deposit back as receiver admitted they had problems like that before
Not disagreeing with the general advice about auctions but I would just point out that in Galway city and surrounding areas a lot of perfectly good, normal properties are sold at auction. No title issues, no receivers, no goons. I bought my house at one and my parents sold a house at one and they both had everything perfectly in order. This seems to be different to other areas of the country and is driven by a particular estate agent, as far as I can tell. There has never been particularly good value for the Galway properties at these auctions either. Recently they have been selling off repossessed houses at the auctions but the vast majority of those are not in Galway city.
Anyway, you can’t bid unless you’re completely ready to buy. The solicitor has to do a lot of work in advance, so I’m guessing that’s why you need their name to register to bid (ours was an in-person auction and I just can’t remember if we had to give the solicitor’s name). You should be able to watch the whole thing online though and I would advise doing that if you think you might buy at auction. The Galway auctions were also on an RTÉ programme a few years ago that you should be and to find on the player.
Very good advice there.
I will stay away from auctions as I can see how naive I have been about the process.
Thank you all.