Box Tree cottage in picturesque Lockton, near Pickering, is a prime example of how auction can be the best method of sale for some properties.
The one-bedroom home has a range of outbuildings and views over the North Moors National Park. It is also in need of redevelopment, which translates as the magic word “potential”.
Cundalls set the guide price at £100,000 and it sold at their auction last week for £152,000.
Tom Watson, Director of Cundalls, sums up the appeal of putting a property under the hammer: “The benefit of selling properties via auction is that the process is transparent, fair and the true market value is found. Realistic guide prices can result in competitive bidding and strong sales results and this is particularly true for quirky and individual properties, which Cundalls specialise in.
“Ultimately, an auction reduces stress and there is a clear time lined process from start to finish, as at the ‘fall of the hammer' the deal is done.”
According to Tom, the next Cundalls auction, due to be announced shortly, will feature a number of interesting lots bound to appeal to bidders.
Many properties that are unusual and hard to value end up at auction, along with those in need of renovation. It's a good place to look for small building plots too. There are also perfectly good homes owned by those who simply want a speedy, no fuss sale. They include landlords who want to slim down their rental portfolio and people who have inherited property and don't want it lying empty for too long. Empty homes attract higher buildings insurance premiums.
Those who buy tend to be investors and developers but, according to Hunters, there has been a marked rise in the number of novice buyers attending its auctions and this is part of a growing trend.
The next Hunters sale is on Wednesday, May 30, at York Sports Club. There are a number of lots that look set to be the subject of bidding wars.
Pastauctions have seen homes sell for over 100 per cent above the guide price and viewings extending into the hundreds, with one vendor recently securing the sale of their property for £205,000 from a starting price of £100,000.
Seven of the nine lots at the most recent auction in late April, sold at or above the asking price. The star sale of the night was a semi-detached former Lock keepers cottage in Naburn, York. It was guided at £120,000 and the hammer fell at £168,000.
Seven lots have so far been entered for the auction on May 30. The stand-out is a bungalow on a cliff top in Cayton Bay, near Scarborough. Bids will start at £80,000 The house enjoys views across the bay and has two bedrooms. Outside, there are two garages and a garden. The much-loved home has been in the same ownership for 35 years and the vendor also pays £35 to rent the surrounding greenbelt field. There is also an option to buy this land under separate negotiation.
A three floor commercial property in Dunnington, near York, has a starting bid of £170,000. The ground floor is occupied by a veterinary practice with a ten year lease and there is potential to develop the upper floors into residential accommodation, subject to planning.
A three bedroom terraced house in Norton, Malton, has a guide price of £80,000 to £100,000. It needs updating but is sure to spark interest thanks to its location. Malton is becoming ever more desirable thanks to its historic good looks, independent shops, food festivals and its railway station with links to York and Leeds. Just off the A64, it is on the edge of the Wolds and half an hour from York and the coast.
Another auction site to keep an eye on is Auction House, which operates across Yorkshire. The next Auction House West Yorkshire sale is on July 7 at the Norman Hunter suite at Elland Road, Leeds. Guide prices start from £30,000 for a one-bedroom flat in Huddersfield and there's a building plot in Sowerby Bridge with a guide of £55,000.
Allsop's auctions are in London but you can bid online and by phone. It includes lots from all over the country. The next sale is May 31 and it features The Manor House at Bagdale, Whitby. The period semi is subject to a regulated tenancy, hence the guide price of £85,000.
*Contacts: Cundalls auctions visit www.cundalls.co.uk; Hunters auctions, www.hunters.com; Auction House, www.auctionhouse.co.uk; Allsop auction, www.allsop.co.uk; West Yorkshire Property Auction, www.westyorkshirepropertyyauction.co.uk; Eddisons, www.eddisons.com
Here are somne auction buying tips:
*Note that once the hammer falls, the buyer is locked into a legally binding arrangement and will be expected to pay 10 per cent of the purchase price immediately and the other 90 per cent within 28 days.
*There may also be a buyer premium to pay to the auction house. This can be a £1,000 fee on lots sold for £10,000 or more. VAT may also apply and Sellers may also have additional fees so check the conditions of sale on your lot.
*Getting a mortgage offer on an auction property can be difficult. Most banks and building societies are also loathe to lend on a property deemed uninhabitable. There are specialist finance providers, though their interest rates and fees are higher than a residential mortgage.
*Always view the property. You can then assess the location and the condition of the building.
*The duration between an auction being announced and the sale is between four to six weeks. This gives you just enough time to exercise due diligence. Request the legal documents from the agent, get a solicitor to check them over and get a survey.
*Do your sums and add a 15 to 20 per cent contingency for a property that needs renovation as they almost always come in over budget. It is very easy to get carried away in the heat of the moment but stick to your maximum price when bidding. If the reserve price is not reached and the property is withdrawn from the auction, there may still be a chance to buy. Approach the auctioneer after sale ends and ask if it is possible to buy by private treaty. If you ask what the reserve was and try and get as close as possible to it, you may stand a good chance of securing a deal.