When publican Adam Giles, 42, saw a three-bedroom, Grade II house up for sale in Bewdley, Worcestershire, he knew he had to buy it.
“I had always wanted that house,” he says. “I was on my computer, and it popped up that it was being sold so it felt like destiny.”
Giles didn’t have much time to mull things over however as the online auction had just 72 hours left to run.
“I rang and left a message with the estate agent and sent them an email too. I viewed the house at 11am and the auction was due to finish at 2pm so I went straight to the bank from the viewing and got a mortgage in principle. It’s the fastest thing I’ve ever done,” he said.
Giles bought the property via an online property auction run by Bamboo Auctions.
He said: “I got it for a bargain of £80,000. The maximum I would have gone up to was £120,000; I thought it would go for its asking price of £95,000, but it went for the reserve. I didn’t know what to expect – it’s like Russian Roulette when you buy something at auction. I’d only ever seen auctions on the TV with David Dickinson. It was done on an impulse at the eleventh hour but, if the bank had said ‘no’, I wouldn’t have said ‘yes’.”
Giles had a deposit of £8,000 and got a mortgage of £72,000.
“The process of getting a mortgage was quite simple; they just asked a few questions about the house: was it made of brick? Tiled? How old? Is it inhabitable? Because the house is such a low value, I don’t see there being a problem with the mortgage and it’s currently with the underwriters,” he said.
At the same time as arranging his mortgage, Giles also rang his solicitor. “He said it was a ‘slight gamble’, but I know some builders, so I got them round to check it. There is one covenant on the property but that’s not too bad.”
Unlike in-person auctions, online auctions involve bidding via the internet or on your phone, and modern technology nearly conspired against Giles.
“It was a bit nerve-wracking. I only had 3 per cent on my phone. Someone else (named Mr T) bid £50,000, and I was Mr A and put in a bid for £75,000. The app gave me a heads-up that Mr T was £1,000 ahead, so I went to £85,000. My heart was beating with 30 seconds to go and then it said I’d won!”
Giles describes the property as “a quirky, different house,” as it has three bedrooms, a garden, but no parking space.
“The lady who lived there before lived there for 60 years and was the local historian for Bridgnorth. We’re going to rename it Historian’s Cottage in respect to her. The potential is amazing. The garden has a pond, greenhouse and apple trees and is a big tick box,” he said.
The house requires a significant amount of renovation, and Giles has budgeted £60,000 for the work and £80,000 for a bigger kitchen extension.
“The roof isn’t in the best condition, but the house has stood there for 300 years so I don’t think it’s going to fall down. There are cracks in the walls, but they’re pretty cosmetic. What I saved on buying it, I can put towards the renovation. I think once it’s finished, it will be worth £500,000, but I’m going to keep it to live in,” he said.
The plan is that the property will still have three bedrooms but also two bathrooms, a big kitchen with bifold doors that open out onto the garden, and potentially solar panels on the ground floor.
Giles said: “I have done a big renovation before. In lockdown, I did some work on my pub. For the extension, I’ll work with civil engineers and be very hands-on. I know a roofer and scaffolder so I will get it watertight first and put new windows in.”
“I’m pretty confident that we will get planning permission as the house will look exactly as it does now. As long as I don’t mess with anything too specific, for example, the front door and the gables, I should be OK. I’ll keep all the original fireplaces too. I currently live above a 700-year-old pub, and, admittedly, listed buildings are a pain, but I will work with the conservation officer.”
Giles is planning to emigrate to Majorca and open a bar there but, because of Brexit, will need to come back to the UK every 90 days.
“I had thought about renting but this offers me a permanent bolthole. I’ve got a mortgage on it for the time being and, when I sell my business I’ll pay that off. I can’t start the extension straight away because of all the red tape as it’s listed,” he said.
While Giles got the property for a good price and has lots of exciting plans for it, he admits there were some disadvantages to buying at an online auction. “I didn’t know about the auction house fee initially – that was £5,000 and a bit of a shock (£3,960 is the buyer’s fee which Bamboo charge and £1,040 is a holding deposit which goes towards the 10 per cent deposit of the property).”
Giles bought at a conditional online auction so now has 20 days to exchange. His lawyers have all the details and he’s just waiting for his mortgage to be accepted and the funds to be released.
“It’s a bit of a steal. Friends have said to me: ‘If I’d known, I would have bid’. I say: ‘You should have then!’”
How buying at an online auction works
- As part of the registration process, all bidders must carry out an enhanced ID check, including a soft check on their credit report, and also input their payment details and solicitor details.
- While you don’t necessarily need a mortgage in principle to bid, buyers are responsible for ensuring that they can afford the price they bid.
- Online auctions are either traditional or conditional. A traditional auction operates in much the same way as if you were buying in a live auction room and, if you are successful, you’ll be legally obliged to complete the sale of the property, with exchange occurring when the auction ends. For this reason, many bidding at these auctions are cash buyers.
- At a conditional online auction, if you’re successful, you’ll enter a reservation agreement and have 20 working days to exchange and a further 20 days to complete.
- All property listings come with a legal pack which it’s advisable to get a solicitor to look at before you bid.
- You need to check and agree to the online auction’s terms & conditions and their fees before you bid.