The latest auction run by Network Auctions at Hatfield House in Hertfordshire was one of its most successful yet.
A total of 80% of the lots were sold from a catalogue of 35 properties and the amount raised was £6,048,500.
Lots sold ranged from a selection of apartments selling between £40,000 and £50,000 to a semi-detached house in Stanmore with planning permission to build another dwelling in the side garden which sold at £488,000.
A particular feature of this auction was the number of public houses for sale, most with residential development potential. A total of 12 were sold throughout London and the Home Counties.
Auctioneer Guy Charrison said: “We were very pleased with the results achieved pre-auction, on the day and post-auction.
“The amount raised was our second-highest result, and despite a challenging market our partner agents did an excellent job in creating interest and activity in the room.”
Meanwhile, Essential Information Group reports that residential property auction sales did well during August, with the number of lots jumping and the success rate sharply increased.
Around 20% of the lots were repos, with buy-to-let investors active.
In August, there were 449 lots on offer, compared with 349 in August last year. Of these, 78.4% sold, compared with 58% last August.
While August was a quiet month, with just 47 auctions held as opposed to the normal monthly average of 120, EIG managing director David Sandeman says that August’s strong figures are indicative of how the auction market is faring, compared with a pattern of declines at the Land Registry.
Chris Baguley, director of specialist lender Auction Finance, said: “It is likely that more repossessed properties will be sold in the auction room towards the end of the year and into 2012.
“We’re experiencing an increase in demand for finance as investors snap up homes going under the hammer. With repossessions, lenders want to achieve a sale quickly and therefore there are opportunities to buy properties at a low price.”
%20-%20IMAGE%20Client%20Accounting%20%E2%80%93%20what%20are%20your%20options.jpg)
Comments
Sibley's...: I am sure that Brian will respond in due course. In the meantime - I'll have a go as an ex-Agent.
To answer your last question first, it is as simple as the Corporate Agencies have the clout. They have specialist departments to handle repossession portfolios on behalf of the majority of lenders, and they then factor out the work (and in the process earn a substantial proportion of the marketing costs...).
Now this is where things get a bit wooly. If it was PeeBee or Sibley's... selling their property, then we would appoint the Agent who, in our opinions, would do the best job for us. Should be the same in these cases, yes? You would think so. Simple fact is they don't care - as long as the job gets done and they cream it off. If they appoint an independent, then they charge them a Fee for introducing the deal: If they appoint their own brand Agency, then they charge them a Fee for introducing the deal. They also get brownie points for keeping it 'in-house', of course... my old company's CC Dept was targeted to keep minimum 65% of the business within the umbrella.
It is ultimately the Lender who dictates the route of sale, however it will be generally based upon recommendations made by surveyors and/or marketing Agents. Again, this is in my opinion an area of unsecure ground. Is simply going to auction sufficient to demonstrate that the property was FULLY MARKETED in order to achieve the best result?
As you state, if a property does not sell with an Agent then the next most logical route is auction. At least this way, the Lender can display some attempt to achieve a sale under 'normal' marketing methods.
Hope that helps - although some Agents may disagree with my summing up, as it is my personal observations of previous life in Corporate and Independent Agency as well as observing what is happening from outside.
Now here's one for you, Sir - or anyone else, for that matter. Repossessions - an unfortunate fact of life for some. One that for some is simply a disaster waiting to happen; for others is a cruel twist of fate. One that SHOULD be avoidable, though - regardless of circumstance. That in this market, however, has a far greater chance of befalling a borrower in trouble than when properties are selling like hot cakes.
SO... why, in 2006, when said cakes were selling while still happily baking away in the oven, were there nearly TWENTY THOUSAND repossession sales?
I just don't get it.
Actually Brian (being an EA), you can help me out with something here.
Why do some repos get sold on the open-market via an EA and some go straight to auction? Is it the lender that determines which route they take?
I'm also under the impression (perhaps wrongly) that repos that can't be sold on the open-market by an EA will eventually go to auction instead?
Last one, why do repos go to corporates and not indys?
Sorry my comments on Auctions being so wrong, have been clouded by my perceived support for the borrowers.
I still think they have a right for the Repo to be sold at the best price, reduce their debt and not just to quickly fill the greedy coffers of the Corporates.
I can see there are two seperate issues here.
I get the impression that the corporates having the monopoly on repos is understandably a bone of contention for the indys. I can sympathise with that, in the interest of fairness I think a better way of 'divvying-up' repos would be to allocate them to the EA branch which has the demonstrably highest conversion rate (is that a correct term?) ie % of sold props to total instructions.
In terms of the morality of lenders taking possession of their property I have absolutely no issue with that. As a private renter, should I find myself out of work and unable to pay the rent the LL would boot me out and find someone that could. Someone in the same position but with a mortgage shouldn't receive special dispensation.
Quite rightly, the lender has advanced a loan in good faith that it will get re-paid. Should I default on that loan it's only right that the lender seek to claw-back as much of the outstanding loan as possible.
In any event Brian, heard of Mortgage Protection Insurance?
Spare some pity too for the prudent savers and pensioners who are losing serious amounts of interest to avoid others being repossessed.
Sibley- not 12 months, far far less than that.
No small print in a mortgage can protect someone from losing their job. No EA, love or hate them, would sell their own property at auction in 99.9% of cases, as they know it will achieve considerably less that way.
Auctions just improve the Corporates stats so lenders give them more to knock out. Cannot be fair?
Sibley's...: Thanks for the follow-on. It puts what you initially said into a different category.
This is the problem, though. Firstly, ninety-seven out of 100 buyers don't read the LARGE print of their mortgage document, never mind the microbabble. Secondly, repossessions happen al the time, for many reasons. As you rightly say, a mortgage is to all intents and purposes a hire purchase agreement and we simply live in the property until such time as the agreement is paid in full. But THAT is where the problem deepens. As long as the borrower pays their dues, all is hunky chunky. THE MINUTE that they stop paying, the Lender doesn't want the loan any more - so they offload at the first opportunity for whatever they can get. If there is a shortfall - then that remains the problem of the defaulting borrower. Win:win as far as Mr Lender is concerned...
But as to how this 'benefits' the market - you tell me, please. How many of these 'bargain' properties sell to the Sibley's... of this world do you think? Last seven auctions I have attended - the answer is two. And the 'parasites' that Brian referred to dropped out in each case maybe 20% lower than the final hammer prices!
They, don't forget, are the 'pwoperty developers' that you see and scream at on Homes Under The Hammer who snap up these homes, tosh them out babysick beige and then try to screw that 20% back out of the market!!
Sibley's... - those defaulting borrowers could just as easily be you or I with just the slightest twist of fate, bud.
Thankfully, so far, not.
I know it's a bit harsh PeeBee but until you pay-off your mortgage you're simply renting from the bank.
Plus, lender forebearance is such that you'd need to be 12 months in arrears before they'd even consider possession. Not forgetting the govt will pay your mortgage interest for a finite period (SMI).
Someone snapping-up a bargain at auction is no less reprehensible than someone selling their overpriced tat onto unsuspecting buyers.
Sibley's... - I have grown to expect better from you than that, mon ami!
Caveat emptor Brian.
It's in the small print of every mortgage.
Pity the poor borrowers who having already lost their homes now lose more money sold at a parasite auction rather than private treaty through a good independent agent who will have achieved a better price.
Success for who?