GU5

Has anyone ever bought land at auction?

How does it work? Are there any major pitfalls associated with doing it etc?

richardg

never actually bought, but i've seen it done and i've bought after auctions where things haven't sold

firstly, you have to do all your homework beforehand - ie searches (although a seller's solicitor will often cover this as part of their legal pack), title checks (plus indemnity insurances if necessary), funding, etc etc which means you could spend loads of time on something only to find that someone else will pay more....or that you get caught up in the moment and end up paying too much

i see you're a 15min drive north from me - is there something interesting coming to auction????

if you;re interested in how the process works, look up dedman commercial (southend) or countrywide, athawes etc etc - there are loads of auctioneers about and if you have the time it's well worth going to see an auction

scooby2!

As has been said above the most important thing, is do your homework as the major pitfall is ending up with something u didnt want!!

Also I would suggest, much like any other auction, u decide beforehand how much this piece of land is worth to you personally, and then stick to that if you bid at the auction - if ur outbid by someone else, so be it! Don't get carried away by the occassion and pay more for the land than it is realistically worth.

Make sure u read all the sale particulars issued by the auctioneers beforehand too, for % of deposit, etc as this will be payable on the fall of the hammer by the winning bidder and completion is usually within 28 days of auction.

Good luck

MikeCardiff

iTrader: (2)

There are basically two sorts of land for sale - 1) has planning permission already, will be hugely expensive for the size of the plot, and 2) farming land that will probably never get planning permission, very cheap ( around £4K per acre estimate in my area ) - not really worth bothering with unless you are a) a farmer, b) want to rent it to a farmer or c) setting up a horse stables or just fancy owning your own field.

As an example, two fields near me went up for auction last month - total area was around 23 acres and the guide price was £100K. Was on a 99 year lease, being rented to a local farmer for £1000 per year. The main reason for the cheap price is that the land is just outside the set boundary of the village, so will never get planning permission for residential use. If it did have planning permission you would probably be looking at at least a couple of million for that amount of land.

Someone else in the village bought an existing house on a large plot, knocked down the house and then applied for PP to build 4 houses on the site - PP was denied, and the only permission that would be given was to build a house with a footprint the same size as had been there before. The plot isnt that wide, but is very long, and the bloke wanted to build 4 houses at 90 degrees to the road to fit them in.

So this 'property developer' bought a house and land for £230K, spent all the money demolishing the existing house, and has had just the land with PP for sale for £250K for about two years now. To build a house the same size as previously there would cost around £150K, so the total would be around £380K, and if he was lucky he could sell it for an absolute maximum of £330K.

gingerboy

As has already been said be very careful and do your homework.

I bought a piece of land with full planning permission, currently we have appointed an architect to change the plans which once a few things have been tweaked will then be submitted.

The days of finding plots that are sitting waiting to be developed are long gone, the majority have been snapped up........... be very careful regarding restrictive covenants and it is worth speaking with your local planning office if you know of a plot near to you to get an idea of whether or not you have even the remotest chance of getting planning permission. Most planning offices have either an afternoon or morning where you can pop in and discuss things or you can make an appointment to see the planning officer responsible for the area in question.

Buying at auction attracts vat for the seller so wometimes it is worth tracking them down to see if they will do a deal, that said it depends on the situation, how confident they are that the plot will achieve or exceed reserve etc etc.

Just take your time and get searches done as an absolute minimum before you part with your hard earned.

An alternative is to find an existing dwelling with a sizeable plot attached to it......... but some councils are really tightening down on this approach. Also does your local council have a limit for how many new homes can be built during in set periods? If so what % of that quota has already been achieved as this also may well impact your chances.

Regards

GB

Scott W

Also check how much of a deposit you have to lay down there and then (I think our local ones were 10%). Another thing is that some of the guide prices at an auction we went to were a lot less than they went for (they typically went for about 25-30% more).

nooobyscoooby

Go and talk to the auctioneers as soon as possible.

You will find them very approachable and they will tell you exactly what you need to do beforehand.

If you bid, it will also help that they will know your face.

Find out how the bidding goes and in what increments.

At a certain price range, it may move at £250 or £500 a time. Then it might be £1,000 a time or even £5K or £10K depending on the value.

I think you have to put 10% down on the day of the sale if you are successful and so you will have to have the arrangements in place to do so and you will be obliged by law to complete, probably within 21 days or your deposit is forfeit with costs as well, so if you bid you really are making an absolute commitment to buy.

If you bid, stand at the back with a spotter or two to watch the crowd so you can see who is bidding.

Bide your time when the bidding starts and wait until it slows if it is still in your price range before bidding.

Do NOT exceed your predetermined maximum! Only pay up to what you think it is worth to you and then turn round and walk away.

Good luck!