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mrsmelly

House auction

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Ok Ok so its not a property forum but lots of people on here buy/sell/let property so here goes. Property has always bored me shitless so you property boffs please advise. I am selling mums very old house that is in need of renovation and buying her a modern one all done, as doing property up is mind numbingly boring. My question, I have a couple of house selling blokes coming to see it next week, I am not messing about trying to get top dollar with trye kickers and chains so auction it is , however. Whats is best these days Modern auction or traditional as I need to ask em some questions. Taa.

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What MTB said.  We used modern-auction to sell a bungalow about 7 years ago.  Easy but not satisfactory, pay up front, still get tyre kickers, poor price if little interest.  Solicitors were very sniffy about it.

 

We went the old fashioned way when we sold up in Norfolk, much better experience, they mainly get paid on completion and may help with the nagging at solicitors.  Keep an eye on the guide/expected price they quote.  Commision is often stepped according to the price on the agreement, which will be just over an increase step.  Hey presto, you accoet a lower offer (under the threshold) but they get the higher percentage

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Tim. Auction is a last resort. Not that they can in Yorkshire, but two of my sons are renovating a house near Petersfield ready for sale following years of letting with very little investment. 
 

They have done loads of works. New kitchen, bathroom, new plumbing, some floor replacement, plastering,  carpets, windows, doors. Created a enlarged driveway, removal of an old conservatory and redone the patio. The owner is chuffed to bits and believes this investment is well worth it. Makes the property more rentable at a vastly increased rental. I think the new rent is in the region of £1700 pcm. Not suggesting you do the same to mums property, but a bit can make a lot. 
See what they have to say at the auction house. MtB has the correct idea. There are still developers in abundance. Think of a price and start deducting the cost of renovation. Ie. Kitchen- £4000. 

My brother has a ‘needs some work’ property with land for sale near Farnham. (His ex-hairdressing Salon.) Lots of initial interest.  

Edited by Nightwatch

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5 minutes ago, Nightwatch said:

Tim. Auction is a last resort.

 

Yes. Best strategy is actually to enter it into a conventional auction in, say, June 2020, and in the interim give it to the hottest local estate agent with instruction to get ot sold and completed before the auction date or deal's off. Make sure the contract you sign reflects this as it is not normal. EA will normally expect payment regardless once they have introduced a "willing and able buyer", regardless of timescales. 

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1 hour ago, Boater Sam said:

Give us a clue, location, size etc. May be interested, CASH!

Thanks to everyone who has responded. I will bear everything in mind regards tyre kickers and may go the way MTB says re cash buyers no chain only if thats what can be done thanks. Thing is we could do it up but simply cannot be arsed and mum would have to relocate or move around the house anyway to do it, so we are selling it and moving her somewhere better suited. The house is in a very well liked but expensive ( For Yorkshire ) village. The average house price on mums postcode is now via zoopla 442,243. The cheapest house sold there last year a 3 bed semi  for 250k. The one opposite mum sold for 197k in 1996!!!!!

Mums is a 17 century stone detached cottage on a garden easily big enough to build a 5 bed detached if someone wanted to. Thing is it need gutting, re wire, bathroom, kitchen, extension flat roofs binning etc etc. Its easily the best plot on the postcode being the only house on that side of the road set in the corner of a greenbelt field, no chance of being built on been knocked back so many time landowner multi millionaire has given up so her outlook is superb and uninterupted. There was also a 2 bed terrace sold for just shy of 200k two years ago 100 yards up the road. Thing is mums needs lots and lots of work so we dont have a clue what its worth so will be seeing the bods as arranged next week. We think there may be a small profit but how much no body knows ( 200 pounds paid for derelict in 1953 )  Theres a five bed for sale at present at 875k we know mums is tiny and at the bottom end of the scale but who knows??

Might put it with Auntie Wainright see how she does :D

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With that said you would be mad to go for an auction. Put it on with a good local estate agent at a price you are happy with. Make sure estate agent knows you want accompanied viewings and a quick sale - get that in the agreement...  Forget about ONLY cash buyers some will just chase the price down (EAs have vastly different interpretations of the phrase anyway). 6 week contract with EA max and then review. There is no quick/amazing profit to be made on the property by a developer or a BTL forget auctions you want someone who wants the property/land as a home and can move fairly quickly.

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Another thing. Make sure the EA understands the importance of photos, you say the house is on the best plot and the outlook is superb - get a semi aerial shot to show that - photographers have massive poles now that can give an indication of the plot far better than a traditional low level photo. You might have to agree a one of price for this but expect it to be in 100/200 pound range.

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33 minutes ago, StationMaster said:

Another thing. Make sure the EA understands the importance of photos, you say the house is on the best plot and the outlook is superb - get a semi aerial shot to show that - photographers have massive poles now that can give an indication of the plot far better than a traditional low level photo. You might have to agree a one of price for this but expect it to be in 100/200 pound range.

Now they use drones!

Edited by Graham Davis

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3 hours ago, mrsmelly said:

 

Mums is a 17 century stone detached cottage on a garden easily big enough to build a 5 bed detached if someone wanted to.

You didnt say if it was listed or if there were any planning restriction on the plot! That would make a big difference to value.

We bought a dilapidated  bungalow near Cardiff, knocked it down and built a new big house. Sold it and made a bunch of money.  If the planners would allow it, that would be a great way forward. No VAT on new builds. If you dont have the cash to do the development, then find a developer who will do it and do a deal with them. It sounds like  a new big house would be in big demand.

Certainly dont go down the auction route and ask the EAs about planning restrictions.

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1 minute ago, Dr Bob said:

You didnt say if it was listed or if there were any planning restriction on the plot! That would make a big difference to value.

We bought a dilapidated  bungalow near Cardiff, knocked it down and built a new big house. Sold it and made a bunch of money.  If the planners would allow it, that would be a great way forward. No VAT on new builds. If you dont have the cash to do the development, then find a developer who will do it and do a deal with them. It sounds like  a new big house would be in big demand.

Certainly dont go down the auction route and ask the EAs about planning restrictions.

Thanks Andy. Luckily even though its an old house there are no planning restrictions or listings etc. In fact a bout five years ago my sister had an architect look at the plot and drew up plans for her for a 3 bed detached property in the present garden. Its not a big plot but in todays market a very large house or indeed two three bed semis would go on there. Sister decided not to go ahead and stay were she is.Money to completely do the property up is not the problem ( sisters got plenty ) thing is we have reached a point where we need to look after mum and the house simply isnt up to it. We would have to move her out and do it then move her back etc and aged 99 its not about making the most money, the important thing is comfort for her and for those of us looking after her. So get rid and buy somett else with two bathrooms etc. I am pleased I put this post up as I will ask more pertinent questions from the AE bods I am meeting next week :cheers:

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28 minutes ago, mrsmelly said:

Thanks Andy. Luckily even though its an old house there are no planning restrictions or listings etc. In fact a bout five years ago my sister had an architect look at the plot and drew up plans for her for a 3 bed detached property in the present garden. Its not a big plot but in todays market a very large house or indeed two three bed semis would go on there. Sister decided not to go ahead and stay were she is.Money to completely do the property up is not the problem ( sisters got plenty ) thing is we have reached a point where we need to look after mum and the house simply isnt up to it. We would have to move her out and do it then move her back etc and aged 99 its not about making the most money, the important thing is comfort for her and for those of us looking after her. So get rid and buy somett else with two bathrooms etc. I am pleased I put this post up as I will ask more pertinent questions from the AE bods I am meeting next week :cheers:

If money isnt an issue then buy a new house for your mum, move her into it then knock the old one down and rebuild. A 2500sqft house will only cost circa £250K  to build (plus demolition costs) and you should be able to sell it and generate a profit of £4-500K on the new house which then pays for your mums new house and a hefty profit to give to your kids/nephews/nieces. If your sister has the cash then think of the return on investment when you sell it.

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2 minutes ago, Dr Bob said:

If money isnt an issue then buy a new house for your mum, move her into it then knock the old one down and rebuild. A 2500sqft house will only cost circa £250K  to build (plus demolition costs) and you should be able to sell it and generate a profit of £4-500K on the new house which then pays for your mums new house and a hefty profit to give to your kids/nephews/nieces. If your sister has the cash then think of the return on investment when you sell it.

Yes, we have looked at all that. In fairness my sis is a rock steady eddie and has got herself into a great financial position easily sustainable for the rest of her life. In her sixties like me she has no want or need to have any hassle chasing money and profit ( arent we weird lol ) She goes on holiday whenever and wherever she wants, has a beautiful detached property and her son has his own business and house aged 25. Whilst I am not knocking anybody who feels the need to chase money, on this occasion we simply need rid of a house that needs substantial upgrading and moving on to something already sorted. There are cheaper villages very close due to silly house pricing that will enable to move mum with little hassle.

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13 hours ago, Dr Bob said:

If money isnt an issue then buy a new house for your mum, move her into it then knock the old one down and rebuild. A 2500sqft house will only cost circa £250K  to build (plus demolition costs) and you should be able to sell it and generate a profit of £4-500K on the new house which then pays for your mums new house and a hefty profit to give to your kids/nephews/nieces. If your sister has the cash then think of the return on investment when you sell it.

The £500K profit  only appears if you assume the house could not otherwise be sold for any price.  The prospects of redevelopment, if they are that good, ought to flow through to the price achieved if the house is sold as-is, subject to any developer's allowance for risk and profit.   

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14 minutes ago, Tacet said:

The £500K profit  only appears if you assume the house could not otherwise be sold for any price.  The prospects of redevelopment, if they are that good, ought to flow through to the price achieved if the house is sold as-is, subject to any developer's allowance for risk and profit.   

Have you ever bought an old property, knocked it down and rebuilt?

The problem is cash. As a developer you need to fund the old property, have the cash to knock it down and rebuild so for a developer that is likely near £500K. For Smelly he would need say £200K to buy the new house for his mum and £250k for the rebuild. All that spent well before the new house is sold for £750K+. A developer will not go over the 'normal' price unless there is a big opportunity for multiple houses. The profit comes with the ability to have £500K of cash available up front. Without that cash, you cannot do it.

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4 minutes ago, Dr Bob said:

As a developer you need to fund the old property, have the cash to knock it down and rebuild

Our house insurers have included a cost of 'clearance' in the cover. On questioning they explained that in the event of a major fire it would cost (up to) £10's of thousands.

 

A typical clearance cost being £15,000 for a 200m2 building.

 

Demolishing a House – Order of Works

The following order of works is typical for demolishing a house:

  • Cut off and cap all services such as main water and sewer connection, electricity, gas and telephone
  • Erect site fencing and protect the site; erect scaffold if required
  • Hazardous material (i.e. asbestos) removed under licence or by specialists if necessary
  • Soft strip all loose items, kitchen, sanitaryware, and remove all cabling, lighting, plumbing, radiators etc
  • Remove all doors, windows frames, linings, internal/external timber mouldings etc.
  • Strip roof and lead flashings
  • Remove structural timbers, joists and trusses
  • Demolish walls, salvaging bricks for example. Unwanted materials can be removed for crushing
  • Break up remainder and grub up foundations and redundant drains

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1 minute ago, Alan de Enfield said:

Our house insurers have included a cost of 'clearance' in the cover. On questioning they explained that in the event of a major fire it would cost (up to) £10's of thousands.

 

A typical clearance cost being £15,000 for a 200m2 building.

 

Demolishing a House – Order of Works

The following order of works is typical for demolishing a house:

  • Cut off and cap all services such as main water and sewer connection, electricity, gas and telephone
  • Erect site fencing and protect the site; erect scaffold if required
  • Hazardous material (i.e. asbestos) removed under licence or by specialists if necessary
  • Soft strip all loose items, kitchen, sanitaryware, and remove all cabling, lighting, plumbing, radiators etc
  • Remove all doors, windows frames, linings, internal/external timber mouldings etc.
  • Strip roof and lead flashings
  • Remove structural timbers, joists and trusses
  • Demolish walls, salvaging bricks for example. Unwanted materials can be removed for crushing
  • Break up remainder and grub up foundations and redundant drains

When we demolished our house in Cardiff, the builder put an estimate in of £20K. It was a 125 M2  1970s bungalow. They got a JCB in and after stripping the good bits pushed it over in 2 hrs. Total final cost £7K and ready for the rebuild. It turned out a lot easier than they estimated so £13K available for the inevitable project overruns!

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Have you considered the mechanics of buying Mum a new property taking into consideration the issue of care fees later?

I know we all want to keep our loved one’s out of the care system but sometimes that is not possible and protecting her home from being used for her care is possible and legal. 

It’s what I do. 

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8 minutes ago, Dyertribe said:

Have you considered the mechanics of buying Mum a new property taking into consideration the issue of care fees later?

I know we all want to keep our loved one’s out of the care system but sometimes that is not possible and protecting her home from being used for her care is possible and legal. 

It’s what I do. 

Thanks for that. I think my sister is looking in to all that. Our situation is that myself and my two sisters will never let mum go into care unless of course she develops a serious medical condition that takes the choice out of our hands. My wife and my sisters already help mum with baths etc etc, What has changed recently is that mum having reached 99 and still living alone wife and I decided she needs someone full time. Its easier for my wife and I to move in with her but we are not living in the house as it is. We need two bathrooms and moving off our boat is bad enough as neither of us want to live in a house or we would do. Mum comes first. We have power of attorney so the paperwork is no problem and mum is fully compos mentis and happy to move. Thing is we just want to move once with zero hassle for mum and absolutely no building works, thats for others we hate it. This has been a great post for responses and I thank everyone again for your input :cheers:

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22 hours ago, mrsmelly said:

 Whats is best these days Modern auction or traditional as I need to ask em some questions.

 

Having idly looked at a couple of properties being sold by the "Modern Method of Auction", and then looked at the terms and conditions, there is no way I would ever buy this way. If you choose this you could easily put off potential buyers.

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42 minutes ago, David Mack said:

 

Having idly looked at a couple of properties being sold by the "Modern Method of Auction", and then looked at the terms and conditions, there is no way I would ever buy this way. If you choose this you could easily put off potential buyers.

I refuse absolutely to use a modern auction system, its a terrible way to buy.

The idea was the 56 day period so buyers could negotiate the mortgage. It does lead to reduced selling prices for the vendor and increased profits for the agents that use it.

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