So the first house I was really interested in, was subject to some weird semi-illegal bidding process and I walked away.

Rang up about the next potential today; again ticked all the boxes. Sold as a “conditional auction”. Rang up, booked viewing and asked about the bidding process:

Agent:
“Basically, you put your offer in and if it’s accepted, you pay (in my case) a £5k non-refundable deposit, which is added to the sale price.”

Me:

“This is a first time buyer house, how do you expect anyone other than a developer to be able to find deposit and then pull £5k out of the air?! I certainly can’t – thanks, but I’ll pass thank you. Can you cancel the viewing please?”

Agent:

“Oh, no hang on, it’s not firm. Have the viewing and then give me a ring. We can possibly arrange something with the vendor”.

What the bloody hell is this about? A £75k house (previously listed for sale @ £100k normal then dropped to £75k 2 day later by this auction process) that’s in need of serious renovation, subject to a non-refundable £5k deposit just for an offer to be accepted?

Any experiences of buying this way?

Ta

So the first house I was really interested in, was subject to some weird semi-illegal bidding process and I walked away.

Sealed bids by any chance? if so, perfectly legal if not a bit annoying. the other one just sounds dodgy on the face of it! I’d be giving that EA a wide berth!

So second house is going to auction?

Sealed bids by any chance?

Not really, bids are accepted, but the house remains on the market whilst you carry on getting everything done until someone gazumps you.

This one specifically. Last offer was accepted on 4th October, and agents still haven’t put it on public notice.

So second house is going to auction?

No! It’s called an auction, but god knows why. What was described to me bares no resemblance to an auction. You put in an offer and it’s either accepted or not. If not, put in one higher. It’s the whole non-refundable deposit of £5k that bothers me, and the subsequent “oh we can work something out” when I wanted to walk away.

No such thing as a legally binding up front deposit (in England) and your conveyancing solicitor should advise you accordingly.

A deposit should only ever be paid at exchange of contracts at which point the sale is binding on both parties.

All sorts can go wrong in the process up to the point of exchange and you don’t want to be £5k down.

How ever they dress it up this is not cricket.

If you want the house though the best thing to do (after speaking to a lawyer – I used to work in conveyancing but some time ago) is to simply offer £5k below what you want to pay.

But, having said that, this strikes me as a very odd set up as if you buy via auction then you are committed to buying anyway so this funny extra £5k is unnecessary.

If it is not a true auction but sealed bids then they get get ****ed!!

Cheers

Danny B

It’s the whole non-refundable despoit of £5k that bothers me, and the subsequent “oh we can work something out when I wanted to walk away”.

you are wise to be nervous of this. not something I would consider normal house selling practice.

No such thing as a legally binding up front deposit

That’s very interesting, but can’t imagine they’re openly operating outside of the law – they seemed very confident in explaining process until I declared a lack of interest, then suddenly everything was negotiable?!

Asking for a deposit up front is not illegal so to speak so they are not operating outside the law.

However, if you went to a solicitor and explained what was going on they would advise against it as if the sale fell through you would be knackered with no legal recourse.

Estate agents are interested in the sale, not the law. If a seller says ‘this is what I want of a buyer’ an estate agent will go with it.

Hence, now you’ve challenged it they’re coming over all gushy.

Phone the agent and offer your best price and say that the offer is conditional on £5k being knocked off on acceptance by way of the sllers goodwill in ensuring the deal goes through and see what response you get!!

Cheers Uncle Ben; unfortunatley I don’t have an additional £5k to stump up without buggering initial 10% mortgage deposit and fees.

If I like it I think I’ll just make a good offer and sell the fact I’ve no chain, mortgage in principle etc. Vendor may be attracted by a swift sale.

Wouldn’t the £5K deposit count as part of the mortgage deposit?

Your looking at the end of the market that attracts alot of pie in the sky competition perhaps this is as much to stop you pulling out as it is them. I certainly wouldnt be handing it over non refundable . There would be t and c s attached.

But at the end of the day – the old addege “if it looks too good to be true it probably is”

Most refurb projects i found were priced low and attracted a bidding frenzy

Wouldn’t the £5K deposit count as part of the mortgage deposit?

100% nope.

TR, I think you’re right – and the frenzy is starting now with HTB.

Look at dated stuff would be my tip

Stuff thats still being lived in and looks “ok”

Folk seem loathe to pay to rip stuff out but will quite happily pay over the odds for a shell.

Not really, bids are accepted, but the house remains on the market whilst you carry on getting everything done until someone gazumps you.

That’s pretty standard tbh. the house we bought was kept on the market until we could prove we had the money to buy, and the mortgage company told the estate agents they would definitely lend us the money.

That’s pretty standard tbh. the house we bought was kept on the market until we could prove we had the money to buy, and the mortgage company told the estate agents they would definitely lend us the money.

Ok, but that should be then be advertised at STC?

Ok, but that should be then be advertised at STC?

Yes, ideally, though I’m not sure if this is a legal requirement.

no, when the mortgage company makes you a firm offer of the money, for that actual house, that’s when it would become STC IME.

if you have solicitors carrying out searches etc, and it’s still on the market, then yeah that’s dodgy!

I think you need to advise the Estate Agent that you’re a first-time buyer without cash-in-hand.

The Estate agents talked us into the conditonal auction thing as we were not getting viewings. It was total shite and cost me three hundred quid hving a “highly recommended” auction pack put together.

It would of been more productive to just take the house off sale for a month, chuck 300 quid on the floor and set fire to it.

Looking back on it now it was never going to attract the buyers we needed on a one bedroom house.