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14-02-2020, 12:35   #1
Sidney77
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Property At Auction - Be Careful

I purchased a property on BidX1 in September 2019. As per the agreement i paid a 10% deposit within 48 hours. The amount was 140,000 so i have paid 14,000 total so far.

I had already recieved the loan approval for this property from PTSB so they just asked me to have the paperwork done by my solicitor to release the balance.

My solicitor informed me that the title was "horrendous" as there was only a 70 year lease and due to other conditions the legal queries couldnt be answered on it so the bank wouldnt be able to release the funds as it wasn't sellable. She advised me to pull out of the sale and request my deposit back. This was in October.

I accepted this and the sellers legal team have come back to me in January offering only 50% of the deposit back and they want to keep the other 7000 euro themselves.I dont know who is selling the property, just the legal team and that it was sold by online auction by BIDX1.

There was no information about the poor condition of the title at the time of purchase.
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14-02-2020, 12:39   #3
gmisk
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Originally Posted by mloc123 View Post
I thought with any auction, it was up to the buyer to do their due diligence beforehand?
Yes pretty sure that is the case, it is kind of like "sold as seen"
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14-02-2020, 12:41   #4
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That is the risk with auction. It’s not a private sale where you go sale agreed first and then review the legal title and have an engineer look at property and decide it you want to buy it.

The minute your offer is accepted at an auction binding contracts are in place. All legal and engineer work needs to be carried out beforehand.

Rule of thumb is if it’s being sold by auction is because there is something wrong with title.

Tbh I think you’ve done very well getting half deposit back. Under the contract you signed when offer was accepted they could take the full deposit and sue to complete the sale.

It’s not well advertised the difference between and auction and private sale.

Last edited by Dolbhad; 14-02-2020 at 18:50.
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14-02-2020, 12:41   #5
wench
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If all they keep is 7000, you're getting away light.
Contracts at auction are binding, and they could hold you to the full purchase price.
Your issues securing a mortgage on it isn't their problem.
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14-02-2020, 12:45   #6
Graham
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I think this highlights the risks associated with buying property at auction rather than a risk associated with any particular auction house.

As a purchaser at auction it is pretty much down to you to satisfy yourself as to the state of the property and associated title.

To be honest, I am almost surprised the vendor is considering even a 50% refund. I would have expected the vendors to be quite within their rights to compel the completion of the sale.
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14-02-2020, 12:46   #7
djan
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As annoying as it is, I would say that getting half of your deposit is a pretty fantastic outcome given it was a auction sale where AFAIK there's no obligation for them to do so.

Out of interest what happens once the 70 years are up? Who does the property then go to?
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14-02-2020, 12:50   #8
banie01
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How is your not checking clear title or requesting and inspecting the legal pack before bidding?
The fault of BidX1?

If one cannot verify title and condition prior to an auction, one doesnt bid.

Buying at auction carries risk and if one doesnt mitigate that risk its noones fault but their own.


IMHO you are quite lucky that BidX1 have made any offer of a return of funds at all, they ae perfectly within their rights to seek specific performance of completion of sale.
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14-02-2020, 12:57   #9
emeldc
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Surely even at auction you're entitled to know what you are buying. Like, was it freehold or leasehold or just 'house for sale'. If you knew it was just a lease you might still buy it but you just wouldn't pay as much.
Do you get a chance to do any legal searches or to inspect the title deeds before you make a bid because if you don't it sounds like you'd be on a hiding to nothing.
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14-02-2020, 12:59   #10
Graham
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Mod Note

Thread title updated for clarity/accuracy.
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14-02-2020, 13:08   #11
Graham
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OP, did you consult with your solicitor before the sale day?

I can't imagine any solicitor giving any advice other than "Proceed with extreme caution and at your own peril. Complete all searches etc BEFORE bidding."
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14-02-2020, 13:10   #12
Graham
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Originally Posted by emeldc View Post
Surely even at auction you're entitled to know what you are buying. Like, was it freehold or leasehold or just 'house for sale'. If you knew it was just a lease you might still buy it but you just wouldn't pay as much.
Do you get a chance to do any legal searches or to inspect the title deeds before you make a bid because if you don't it sounds like you'd be on a hiding to nothing.
It is almost completely up to the purchaser to satisfy themselves as to any/all of the above before bidding.

That may well include asking your legal professional to complete any necessary searches etc before you decide whether to proceed.

It's not unusual for half the property pack to consist of

Not known
Unknown
We don't warrant
We can't confirm
We don't guarantee....

Last edited by Graham; 14-02-2020 at 13:14.
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14-02-2020, 13:33   #13
emeldc
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OP, did you consult with your solicitor before the sale day?

I can't imagine any solicitor giving any advice other than "Proceed with extreme caution and at your own peril. Complete all searches etc BEFORE bidding."
Should this include a survey. Even if everything else is ok, you might find out after 'buying' that it needs a new roof or something. It all seems like very expensive prep work just to make a bid on a property while all the while trying to safeguard your deposit should you be successful with your bid.
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14-02-2020, 14:18   #14
Dav010
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Originally Posted by emeldc View Post
Should this include a survey. Even if everything else is ok, you might find out after 'buying' that it needs a new roof or something. It all seems like very expensive prep work just to make a bid on a property while all the while trying to safeguard your deposit should you be successful with your bid.
That is the trade off when buying at auction. You may get a bargain, but you need to have checked out the property before you bid. As the op has found, bidding without checking can be an expensive mistake. I am surprised though that the op is getting half deposit back.
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14-02-2020, 14:31   #15
emeldc
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That is the trade off when buying at auction. You may get a bargain, but you need to have checked out the property before you bid. As the op has found, bidding without checking can be an expensive mistake. I am surprised though that the op is getting half deposit back.
I agree you can get a bargain but then you need to pay your solicitor and surveyor even if you're outbid. You might end up doing this multiple times on multiple properties before you have a successful bid.
Certainly a school day for me today
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