Caveat Emptor meaning ‘Let the buyer beware’ is a well-known phrase when it comes to buying property at auction. It’s not meant to scare people – it’s more of a cautionary note to do your homework before you bid and buy. That’s because when you bid on a property at auction – you are committing yourself to the purchase. If you’re the lucky bidder and the hammer has fallen, you’ve exchanged and bagged yourself a property at the hammer price. It’s that simple.
Well, it is – if you have done your homework and know what’s what about a property before you bid. And that’s the key part where so many people go wrong when buying property at auction: they don’t do their homework.
People forget, overlook and just plain ignore all the stuff that needs to be checked before buying a property. I talk with many people who claim horror stories having bought property at auction. But for the most part, the mistakes were avoidable – the property should have been viewed inside and outside before buying, the legals should have been read and preferably checked by a lawyer and, the finances should have been sorted before committing to purchase. Tick off these key things before you bid and buy property at auction and you’re pretty much set for success.
Pretty much…
But, have you thought about googling the address of the property you’re thinking of buying? I’m not just talking about checking out the latest house price stats or the crime rate of the area – I’m talking about the actual google results linked to a property.
The results can be surprising.
And I can’t help but wonder if the bidder of Lot 18 at Harman Healy auction googled the address of 78 Lyndale Rd, Coventry before auction. If they did, they have may been startled to find a YouTube video linked to the address – and a Buyer Beware public announcement warning. And, even for a property being sold at auction – that’s a surprising find!
The video claims the property has been stolen from the lawful owners and that any potential bidder may find themselves as defendants in a claim for fraud – which is a different take on ‘getting more than you bargained for’!.
And for anyone who didn’t see the YouTube clip prior to auction, the alleged owners were in attendance at the auction room to state their position and make it clear to anybody who intended to bid. Given the threats of legal action plus the proceedings and bidders being filmed – I think it takes the notion of ‘buyer beware’ to a whole new level.
Despite the warnings, the property sold for £56k (a colossal drop given £108k was paid for the property in Dec 2006).
Time will tell what happens next. However, it seems the little-known topic of Void Mortgages could be gaining traction.
In the meantime, the key lesson from this auction lot is to do your homework: google the address beforehand- because you never know what surprising secrets a property may be hiding!
Chris
I had a similar situation when I bought a property at auction a few years back. It was sold ‘occupied on terms unknown’. The former repossessed owner refused to acknowledge this and refused to leave the property.
After purchasing I had the headache of having to remove them which took around a month to do.
Because of the issues I got the property very cheap and made around £50k on that deal.
Sam
Thanks for sharing Chris and sounds like a positive outcome. Out of interest what were the costs involved in eviction? Also, one month sounds quick – is that usual?
Chris
The costs were around £1000, which was the accumulative costs for my solicitor writing letters and emails both to me and the occupant of the property. The occupant or trespasser which should be correct term had a fake tenancy agreement which had been issued by his father (after the repossession). It was for 2.5 years and less than a 1/3 of the market rent for the area.
He wanted me to seek possession through the courts, knowing it would take a long time, all while living rent free in the property.
It was a policeman who one day said I was entitled to break into the house and change the locks when the occupant was out and that’s exactly what my builder and I did.
I put a notice in the window saying I’d reclaimed my property and left my contact details for him to arrange to collect his belongings.
He eventually did contact me and my builder and his friends oversaw the move of his stuff.
I was then free to refurb, rent out and refinance the property.
Sam
Thanks for sharing Chris. That’s very useful information to know. Much appreciated.
Richard Watters
I learned a bit about Void Mortgages when you published a blog about a property where the owner was claiming this, but TBH couldn’t really work out if it was valid or not. Do you know any more about this – it would be interesting to know if anyone has successfully fended off a repossession using this tactic.
Sam
This topic doesn’t seem to be discussed much. I don’t know if anyone has fended off a repo using this tactic – however I get the sense that there is growing momentum.