Instead of our usual auction market update, we thought we’d share details this month of what happens if you find yourself in the uncomfortable position of not being able to complete on your auction purchase.

Believe it or not, this is happening more often than it had in previous years. With our work in selling properties for clients at auction, speaking with other traders and speaking with auctioneers on a regular basis, one of the issues we are seeing more and more is in buyers failing either to complete or complete on time.

At the point of writing this article we are working with a London auctioneer and a member of our Auction Buyers Club in rescuing an auction buyer with only five days left on the buyers contract. The

details in brief are that the buyer for one reason or another, is unable to complete the purchase. The purchase is of a property in South East London and was sold via auction for £410,000.
After speaking with the auctioneer and our Auction Buyers Club member, we have been able to conduct substantial due diligence (including an internal viewing with a builder) in order to offer £345,000 to replace the current and potentially defaulting buyer, with our Auction Buyer.

Originally the buyer on the cusp of breaching the auction contract was looking for a rescue buyer to take over their position for £360,000 (plus approximately £10,000 worth of contract fees in the special conditions of sale).

Off the bat the price of £360,000 was acceptable as there are fully refurbished and extended (under PD) properties on the same road for £550,000-£575,000. Prior to viewing the estimated refurbishment/ extension costs were coming in around the £85,000-£90,000 mark. After viewing the asset, we realised that the floor plate of this property differed from the ‘comparables’, meaning that in order to get the same result, further changes to the internal of the building to optimise both the living space and the end value, this project would demand an additional £10,000-£15,000 of works.