A bid too far

House auctions are swift and economical, but the pitfalls can be serious - as one buyer found

Mark Newman had his interest piqued when he saw an ad for a three-bedroom bungalow in St Austell, Cornwall. "I had just moved from the North and needed to buy a place quickly. When I saw the property was about to be sold at auction, the idea really appealed to me," he says. First, however, Mark, who is divorced with a young son, viewed the bungalow. It had a £30,000 reserve price and was only half-a-mile from the famous Eden Project conservation site. "The auctioneer told me it had a 'problem' in the back garden, but as it was 100ft long and I really liked the bungalow and its dormer roof, I didn't probe any further."

Mark Newman had his interest piqued when he saw an ad for a three-bedroom bungalow in St Austell, Cornwall. "I had just moved from the North and needed to buy a place quickly. When I saw the property was about to be sold at auction, the idea really appealed to me," he says. First, however, Mark, who is divorced with a young son, viewed the bungalow. It had a £30,000 reserve price and was only half-a-mile from the famous Eden Project conservation site. "The auctioneer told me it had a 'problem' in the back garden, but as it was 100ft long and I really liked the bungalow and its dormer roof, I didn't probe any further."

His determination won the day and a few days later, as the new owner of the house, he studied the property's deeds. It was only then that he found the "problem" was no less than an uncapped, disused coal-mine shaft under the garden and part of the living room. "It was particularly dangerous as my six-year-old son liked running around inside the house. Then I discovered a house only three doors away had recently collapsed and someone had died," he says.

It was a risk too far. Mark wanted out - and fast - so he put the bungalow up for auction again. This time it went for £59,000 - to a local buyer who, after having the property structurally surveyed, spent £16,000 on underpinning to prevent a potential catastrophe.

Gary Murphy, a partner at Allsop, the largest residential auction house, explains: "Although auctioneers should produce a full legal pack on properties, their searcher may not have picked up on the seriousness of the mining snag and Mark wasn't given the full picture."

Buying and selling at auction is both speedy and economical, but if you have any lingering doubts about a house or flat, get a pre-auction structural survey for around £250 so you know what you are bidding for.

"Anyone who goes to auction should adopt a disciplined approach," says Ray Boulger, senior technical adviser at Charcol the mortgage brokers. "It's vital not to get carried away with all the excitement and end up bidding too high as you may be up against a lot of dealers and property developers who are there because they know they can revamp a problem property far more cheaply than you can."

The successful bidder pays a 10 per cent deposit plus a £150 auctioneer's fee. Contracts are exchanged immediately and completion takes 28 days. Then the property's yours and you can move in. If you need a loan, it's wise to get a pre-sale lender's valuation for around £150, giving yourself a bidding guide and a short-cut to a mortgage offer. Then check the auctioneer's legal pack for deeds, local searches, access and lease details and pay a solicitor £100-£150 to check out planning permits.

If, however, you are selling, an auction can give you a refreshingly fast deal. "The real merit is that it gives you a fixed selling date, but it's important you get the price right so the sale goes through on the day," says Boulger. Sellers usually pay auctioneers 2.5 per cent of a property's sale price plus £350 for entry in the sale catalogue. "They can be a real boon for a property that hasn't moved for a long time, or an unusual one that dealers and potential buyers can study before the sale," says Boulger.

Visit www.allsop.co.uk for a free guide to everything from reserve prices to when and how you can visit a property before it goes on sale and www.propertyauctions.com for a list of auctions in your area.

Discover more property articles at Homes and Property
PROMOTED VIDEO
Sport
Luis Suarez and Lionel Messi during Barcelona training in August
footballPete Jenson co-ghost wrote Suarez’s autobiography and reveals how desperate he's been to return
Money
Welcome to tinsel town: retailers such as Selfridges will be Santa's little helpers this Christmas, working hard to persuade shoppers to stock up on gifts
news
Arts and Entertainment
Soul singer Sam Smith cleared up at the Mobo awards this week
arts + entsSam Smith’s Mobo triumph is just the latest example of a trend
News
Laurence Easeman and Russell Brand
people
Sport
Fans of Dulwich Hamlet FC at their ground Champion Hill
footballFans are rejecting the £2,000 season tickets, officious stewarding, and airline-stadium sponsorship
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Maths Teacher

£110 - £200 per day: Randstad Education Leeds: Secondary Maths Teacher for spe...

Business Analyst - Surrey - Permanent - Up to £50k DOE

£40000 - £50000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

***ASP.NET Developer - Cheshire - £35k - Permanent***

£30000 - £35000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

***Solutions Architect*** - Brighton - £40k - Permanent

£35000 - £40000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

Day In a Page

Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

Wilko Johnson, now the bad news

Former Dr Feelgood splits with manager after police investigate assault claims
Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

Mark Udall: The Democrat Senator with a fight on his hands

The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
New discoveries show more contact between far-flung prehistoric humans than had been thought

New discoveries show more contact between far-flung prehistoric humans than had been thought

Evidence found of contact between Easter Islanders and South America
Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

Cerys Matthews on Dylan Thomas

The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
DIY is not fun and we've finally realised this as a nation

Homebase closures: 'DIY is not fun'

Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

Air New Zealand's wizard in-flight video

The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

Pumpkin spice is the flavour of the month

The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
11 best sonic skincare brushes

11 best sonic skincare brushes

Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

Paul Scholes column

I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

While other sports are stalked by corruption, we are an easy target for the critics
Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker