Auction

Officer999

Hi, apologies if this has been asked already. If it has can someone post the relevant thread, as I couldn't' find it.

So I've seen an apartment in Dublin which I really like but it's going to an auction. I have AIB mortgage approval.

I'm not based in Ireland, but I've already contacted the Auctioneers and they said they are happy to accept phone bids on the day. Anyone got an experience on this?

The auctioneer also said if my bid is accepted they will want the full payment within 4 weeks from the bank. I rang the bank and while they said they don't recommend auctions they will give the mortgage. But the process of paying the full payment from the bank takes a minimum of two weeks.

Has anyone any experience of buying a property in an auction with mortgage approval? Is it a good idea? Thanks!

Claw Hammer

Officer999 wrote: »

Hi, apologies if this has been asked already. If it has can someone post the relevant thread, as I couldn't' find it.

So I've seen an apartment in Dublin which I really like but it's going to an auction. I have AIB mortgage approval.

I'm not based in Ireland, but I've already contacted the Auctioneers and they said they are happy to accept phone bids on the day. Anyone got an experience on this?

The auctioneer also said if my bid is accepted they will want the full payment within 4 weeks from the bank. I rang the bank and while they said they don't recommend auctions they will give the mortgage. But the process of paying the full payment from the bank takes a minimum of two weeks.

Has anyone any experience of buying a property in an auction with mortgage approval? Is it a good idea? Thanks!

You need to have the title checked in advance. It may not be mortgageable.
It will cost you to do this together with the cost of a survey. You may well find that the property will not qualify for a mortgage or if it does it goes above your price. In that case you will have spent money on title investiagtion and survey to no avail.

3DataModem

You generally sign contracts on the day of the auction, so you need to have all the preparatory work done for that (including title, searches, mortgage pack, etc).

Closure within 4 weeks is normal for any sale but things can get delayed.

Chat with your solicitor about the process. Essentially as I say above it means that you have to incur all the effort and cost up to contracts without knowing if you will buy the house, but otherwise it is NBD.

Officer999

Claw Hammer wrote: »

You need to have the title checked in advance. It may not be mortgageable.
It will cost you to do this together with the cost of a survey. You may well find that the property will not qualify for a mortgage or if it does it goes above your price. In that case you will have spent money on title investiagtion and survey to no avail.

Sorry to sound stupid but what do you mean have the title checked? The auctioneer already said they will accept mortgage as opposed to the normal cash. I plan to get the survey as soon as possible actually

Claw Hammer

Officer999 wrote: »

Sorry to sound stupid but what do you mean have the title checked? The auctioneer already said they will accept mortgage as opposed to the normal cash. I plan to get the survey as soon as possible actually

The title is the owners right to sell the property. if you are buying from a receiver there is a good chance the bank won't give a mortgage.
In all honesty you should not waste money on a survey. You haven't even looked at the sale contract. There is no way that you will be able to have it made subject to loan. The auctioneer is a crook if he is telling you that a mortgage will be acceptable.

Claw Hammer

Claw Hammer wrote: »

There is no way that you will be able to have it made subject to loan. The auctioneer is a crook if he is telling you that a mortgage will be acceptable.

This is an interesting perspective, I have never heard a vendor/EA referred to as a "crook" for accepting a finance supported purchase.

Op, despite Claw Hammers statement, vendors do accept mortgage supported bids at auction. But you need to be absolutely aware of the differences between a standard property purchase and a purchase at auction, legally they have different rules and procedures. In a standard purchase your deposit is refundable until contracts are signed, no contract = no deal. At auction, when a bid is accepted the contract is formed, the property is yours, warts and all. You will pay a hefty deposit and then have 4 weeks to complete. If you cannot complete, for whatever reason, you are in trouble.

So, as you have been advised, you need to check the title and survey before you bid, you are buying as seen and unless the auctioneer misrepresented the property at auction, you cannot back out without significant penalty.

Auctions are great for buying a property at below what it would normally be expected to sell for, but remember, there is usually a good reason why it is being auctioned, they are not for the uninitiated op, nor the ill informed Claw Hammer.

Officer999

Dav010 wrote: »

This is an interesting perspective, I have never heard a vendor/EA referred to as a "crook" for accepting a finance supported purchase.

Op, despite Claw Hammers statement, vendors do accept mortgage supported bids at auction. But you need to be absolutely aware of the differences between a standard property purchase and a purchase at auction, legally they have different rules and procedures. In a standard purchase your deposit is refundable until contracts are signed, no contract = no deal. At auction, when a bid is accepted the contract is formed, the property is yours, warts and all. You will pay a hefty deposit and then have 4 weeks to complete. If you cannot complete, for whatever reason, you are in trouble.

So, as you have been advised, you need to check the title and survey before you bid, you are buying as seen and unless the auctioneer misrepresented the property at auction, you cannot back out without significant penalty.

Auctions are great for buying a property at below what it would normally be expected to sell for, but remember, there is usually a good reason why it is being auctioned, they are not for the uninitiated op, nor the ill informed Claw Hammer.

Much to ponder, thanks for the feedback.

When you say a hefty deposit, is that to the auctioneer, and on top of the standard 10% deposit to the bank?

Rew

Officer999 wrote: »

Much to ponder, thanks for the feedback.

When you say a hefty deposit, is that to the auctioneer, and on top of the standard 10% deposit to the bank?

You don't pay a deposit to the bank ever, you pay it to the vendor/auctioneer

Officer999

Officer999 wrote: »

Much to ponder, thanks for the feedback.

When you say a hefty deposit, is that to the auctioneer, and on top of the standard 10% deposit to the bank?

You pay it to auctioneer/vendor when your bid is accepted, you should contact auctioneer and ask prior to bidding. Remember, the contract forms when the hammer drops, you are unlikely to recover the deposit if you renege on the purchase later.

4ensic15

It is obvious that the o/p knows nothing about buying an apartment whether at auction or otherwise. He should take his time an do some research first before he gets burnt.

Marcusm

Dav010 wrote: »

This is an interesting perspective, I have never heard a vendor/EA referred to as a "crook" for accepting a finance supported purchase.

Op, despite Claw Hammers statement, vendors do accept mortgage supported bids at auction. But you need to be absolutely aware of the differences between a standard property purchase and a purchase at auction, legally they have different rules and procedures. In a standard purchase your deposit is refundable until contracts are signed, no contract = no deal. At auction, when a bid is accepted the contract is formed, the property is yours, warts and all. You will pay a hefty deposit and then have 4 weeks to complete. If you cannot complete, for whatever reason, you are in trouble.

So, as you have been advised, you need to check the title and survey before you bid, you are buying as seen and unless the auctioneer misrepresented the property at auction, you cannot back out without significant penalty.

Auctions are great for buying a property at below what it would normally be expected to sell for, but remember, there is usually a good reason why it is being auctioned, they are not for the uninitiated op, nor the ill informed Claw Hammer.

In fairness, over the past 10 years, few standard title/easily mortgageable properties have been sold via auction in Ireland. Auctions have been used for more than repossessions, receiver sales and the like but they have also been used to move on properties with questionable title, planning difficulties, immovable tenants etc.

If the OP is overseas, they need to closely question the auctioneer to establish whether they are aware of this as the motivation for an auction rather than private treaty or tender sale. If the auctioneer disclaims all such knowledge, a solicitor would be needed for at least a cursory review of the documents but the OP needs to realise that he bank will not confirm availability of funds until “good mortgageable title” can be certified. If the hammer falls to the OP without this being evident then, absent misrepresentation, the OP will be on the hook for the property withoutbank finanvce🐨

On the day, I wou

the_syco

Officer999 wrote: »

So I've seen an apartment in Dublin which I really like but it's going to an auction. I have AIB mortgage approval.

I'm not based in Ireland, but I've already contacted the Auctioneers and they said they are happy to accept phone bids on the day. Anyone got an experience on this?

What's wrong with the apartment? Generally speaking, if it's for auction, it's because people cannot buy it via normal methods using a mortgage.

Have you asked for the legal pack for the apartment?

You'll need to pay the 10% when the hammer goes down. I think most Irish banks will only give foreign buyers a mortgage for buy-to-let or holiday homes. Do you intend on buying it to live in it yourself?

Askthe EA

Claw Hammer wrote: »

The auctioneer is a crook if he is telling you that a mortgage will be acceptable.

This is 100% incorrect.

I have sold numerous properties at auction to mortgage buyers.

Claw Hammer

Askthe EA wrote: »

This is 100% incorrect.

I have sold numerous properties at auction to mortgage buyers.

Maybe so, but only after a solicitor has confirmed that they will certify title for the bak. the o/p hasn't had the title checked,he won't be allowed insert a subject to loan clause, if he forfeits his deposit, the EA will get another commission to sell it again. The EA should have told him to get the title checked and if the solicitor is happy, then bid.

Claw Hammer

Claw Hammer wrote: »

Maybe so, but only after a solicitor has confirmed that they will certify title for the bak. the o/p hasn't had the title checked,he won't be allowed insert a subject to loan clause, if he forfeits his deposit, the EA will get another commission to sell it again. The EA should have told him to get the title checked and if the solicitor is happy, then bid.

Wrong again.

Buying at auction is not the same as a standard property purchase, it is up to you, not the EA to check the title/survey the property before you bid, and/or to instruct a solicitor. At auction the bidder assumes all responsibility to check out the property they want to by, the auctioneer cannot lie about the property/misrepresent it, but apart from that, the auctioneer has no responsibility.

4ensic15

Dav010 wrote: »

Buying at auction is not the same as a standard property purchase, it is up to you, not the EA to check the title/survey the property before you bid, and/or to instruct a solicitor. At auction the bidder assumes all responsibility to check out the property they want to by, the auctioneer cannot lie about the property/misrepresent it, but apart from that, the auctioneer has no responsibility.

Who said otherwise?

Claw Hammer

Eh, Claw Hammer,

Claw Hammer wrote: »

The auctioneer is a crook if he is telling you that a mortgage will be acceptable.

The EA should have told him to get the title checked and if the solicitor is happy, then bid.