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Mortgages    4 Comments
On last week’s property show on the BBC they mention that auctions can be a good place to buy property. I touched on it in last week’s blog (which you can read here) – but as it’s such a big subject I thought I’d spin it off into a mini-guide all on it’s own.
There’s a lot of plus points about buying from auction – you can can get a property at a fantastic price, and things will happen at quite a speed – if you win the auction then you’ll walk away knowing that the house is going to be yours in 28 days time. This is great when you think that most conveyancing transactions take a few months to go through from start to finish.
So where’s the catch?
There’s not a catch as such but there are a few really important things you need to be aware of before buying at auction.

Most of the important stuff is related to the proceudre – how things happen at auctions. But before I start going through that you need to bear in mind that although you can pick up a bargain, you can also pay over the odds for something. It really depends on who else is at the auction and how much they are prepared to pay. No-one there is going to stop you spending too much unless you have the self-control to stop yourself. the ideal advice is to set a limit that you’ll bid up to and don’t go any higher. Trust me, when you’re in the thick of bidding on something it gets pretty exciting (although perhaps I should get out more) – if you’ve bid on an ebay auction before then you’ll know that it can get quite exciting near the end, but here you’ve got all your bidding rivals in the room with you and an auctioneer who’s trained to try and egg you on into spending some more cash – “Come on now sir – don’t lose it for a few hundred pounds”
It’s also worth blowing the myth that you’ll end up buying a property by just nodding your head or scratching your nose at the wrong moment. Auctioneers don’t want this to happen and if they are in any doubt as to whether you’re bidding they will generally ask you. If you are bidding though, make your own bids clear. Normally you won’t have to shout out the price you’re bidding – the auctioneer will just call out the figure and if you raise your hand and confirm it then you’ve bid at that price – if you’ve ever watch ‘cash in the attic’ then you’ll already know the procedure.
OK so, given that you’re thinking of buying at an auction what do you need to know?
1. Overview
When you’re at the auction and the hammer drops – you’re committed – you’re legally bound to buy that property at the amount you’ve bid. You’re also bound to pay over 10% of the sale price there and then (i.e. at the auction) as a deposit, and the rest of it will become payable 28 days later
2. Essential Steps:-
Because of this you need to:-

a. Check out the property first (i.e. before the auction) – the sellers are meant to put the title deeds, searches and any other relevant documents with the estate agents at least 7 days before the auction – so get them checked out. Most solicitors will check them out and do you a report on the deeds for a fixed price (we certainly do) – you can then go along to the auction with your eyes open. It’s important to do this stage because otherwise you could (for example) buy a house with no access to it, or where there is a boundary dispute, or other things that could cost you a fortune in the long run. Whenever you’re buying property in the UK it’s ‘buyer beware’ – if you buy a pup then it’s basically your problem.
You have to consider why the property is coming to auction – there are plenty of legitimate reason why people sell at auction – investors wanting to get rid of their stock, someone’s died and the house is part of the estate – anything where people just want a quick sale. However it could also be that there is a problem with the deeds and previous buyers have pulled out because of it – they might stick it to the auction on the basis that someone won’t notice the problem.
So make sure you get the deeds and documents checked out by a professional before the auction (the documents will usually be available at the auction just before bidding starts but that’s cutting it a bit fine to be checking them there. Nothing wrong with cutting it fine, but if it was me I’d like to know in advance that all is OK) .
b. The Deposit:-
VERY important. You’ve got to be able to produce 10% of the purchase price on the day as a deposit – a cheque is normally acceptable but check with the auction house first to make sure – they might insist on a bankers draft.
c. The rest of the money:-
You’ve also got to pay the rest of the agreed price 28 days after the date of the auction. If you don’t then the seller can keep your 10% deposit and sell the house to someone else!!!!! To get this in place you’ve either got to have the cash available, or get a mortgage offer in place. A mortgage offer will cost money in terms of arrangement fees, and valuation fees (the bank will need to send someone out to make sure the house is worth lending on etc – you’ll need to allow time for this to be set up and done before the auction – the last thing you want is for you to commit at the auction and find the bank won’t lend you the money). Also you can do all this and then lose out on the property – in which case the fees you paid to the bank is money down the drain. Another option on this is if you can arrange the money by a second mortgage on another property – people who own buy-to-let’s will often do this (i.e. they borrow more on their other properties and use that money to pay for another property). However if it’s your main home you’re buying (or you don’t happen to have loads of properties lying about!) this is unlikely to be an option.
3. The mechanics of it all: – a picture in words….
When you go to the auction there will usually be a desk where the solicitors are sat. These are solicitors representing the people who are selling. They will have the deeds and document with them, so you can go and ask them any last minute questions. Don’t forget however they are acting for the seller not for you.
The auctioneer will start the auction. You sit down and wait nervously for your property to come up. You bid. You win (hurray!). Normally you would wait until the end of the auction before completing the paperwork. To do this you would go to the Solicitor who’s got the deeds. You’ll sign one copy of the contract and he will give you another copy of the contract signed by the seller, along with the other documents (searches guarantees etc) relating to the property. You’ll pay the deposit (sometimes to the solicitor, sometimes this is paid to the auctioneer). You’ll let the solicitor know who your solicitor is. You walk out of the auction hall incredibly excited, incredibly nervous or both.
You take your documents to your solicitor, who will then move the rest of the transaction forward – basically sorting out payment of the rest of the money. At this stage although you might want your solicitor to ask some additional questions about the property, the answers won’t affect anything – you’re already committed to buying it. It makes sense to use the same solicitor you used to check out the deeds at the start (you did do that didn’t you?), as they may well do you a deal on the fees – taking into account what you’ve already paid them.
If you’ve got any questions about auctions ask them by commenting on this thread – I’ll answer as soon as I can.

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Propertywatch    1 Comment

I’ve just been watching the BBC’s ‘property watch‘ program which I understand is on every night this week. I dread watching stuff like this because I normally find when I watch programs about things I know it winds you up when you hear the rubbish that they sometimes come out with.

I’ve only watched last night’s program (from Tuesday 12th May) so far and overall I’ve surprisingly found it OK. The ‘election-night special’ graphics don’t do it any favours – someone’s run away with the graphics. When they say “50%” you get a 10 foot high graphic behind him showing what 50% actually means. Thanks mate – I’d worked that one out actually.
The biggest doom-monger was some ‘expert’ called Merryn – she took delight in saying that the property market has a load more price falls to come. Rubbish! Every other report in the program seemed to be coming to a similar conclusion – that we’re at or near the bottom of the market in terms of price. So I’m not quite sure where Merryn buys her crystal ball – she didn’t explain about it other than saying it was what she felt. Don’t know if she’s related to the BBC’s harbinger of doom correspondent (Robert Peston) but there’s got to be a good chance.
They touched on the auction market – currently a hotspot in the property market. If you’re prepared to do your homework it can be a good way of getting a property at a good price – each of the auctions we’ve been involved in over the last few months have been thronged and all the properties have sold – many for quite a bit more than the guide price. I had started to type up some initial guides but I’ve split that into a separate blog.
Anyway back to the program.
So what’s my take on the property market?
Well the fall started for us at the end of 2007, and accelerated in spring 2008 – helpfully aided by the press with some stunningly scaremongering headlines. In terms of numbers of people moving it really dropped Around June/July 2008, reaching a bottom in August.
It moved up a tiny bit over the following few months, and then in December we started to hear the first signs that things were changing – people were suddenly out there looking at property – they weren’t buying at that stage but at least they were looking.
That increased activity didn’t start to kick in until February when we finally experienced a bit of a leap in volumes to levels we haven’t seen since last May. Through March and April these volumes have stayed the same – not really rising but not going down either. As the news starts to get out there that prices have stopped falling then I expect more people to come to the market. If you want a conveyancing quote for then just click on the link
Another chestnut that also popped up in tonight’s program:-
“You can’t get a mortgage for more than 75%”
Rubbish! There are a number of 90% mortgages floating out there – the last time I looked HSBC and Nottingham Building Society were both offering this
The main problem I have with programs like this is that they’re designed to entertain – and to do so they always bring in the big graphics, show extreme cases, and try and dewll on the appallingly bad or the amazingly good. The stuff that’s ‘just OK really’ won’t make it onto the program. That’s why we get delightful souls like Merryn popping up on the box. A mate from years ago ran a wine shop and eventually got asked to do reviews of wines at wine tastings. He quickly cottoned on that the way to make sure that his review got into the magazine’s article was to ignore the OK wines, rave about the really good ones and slag off the poor ones – once he’d cracked that he always got his comments published. I suspect Merryn may have tapped into the same rich vein.
While it’s a pain if they’re making a program about the subject you work in, if they did it any other way I suppose it would make for dull television.
That’s all for now – I’ll try and watch some of the other episodes but I’ve got to say it’s a bit like a busman’s holiday, or homework
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Uncategorized    No Comments

For some time now I’ve been seeing the rise of blogging – starting as something that geeks, teenagers, and political activists did. HOwever it now seems to be getting more widespread and I thought it was time to dip my toe into the water

I have actually been blogging before but it’s just been internal stuff within Fidler & Pepper to keep everyone up to date with how things are going in the firm.

Whats the firm? Well it’s Fidler & Pepper Solicitors – We’re in North Nottinghamshire and we employ about 50 staff. I’m managing partner and part time geek. I think it’s a nice place to work (but then I suppose I would say that wouldn’t I) – in 2004 we were in the Sunday Times 50 best small companies to work for – we were very chuffed with that.
So what am I going to write about? well anything I think may be of interest really. At the moment I’ve no idea how often I’ll be writing, but I’ll try and do it regularly (I’ve always been rubbish at keeping a diary so that could be something of a challenge.
Anyway that’s all for now – I’ll come back when I’ve got something worthwhile to say
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