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Post by dan1 on May 15, 2018 18:03:22 GMT
Excuse my ignorance of the bidding process, but I'm unsure as to why knowledge of the reserve price would be helpful in this case. For example, if you intended to bid and you thought it was worth £x and that was your maximum bid with the reserve price being £y then: If x<y then even if you bid the most your bid would be less than the reserve so you would not secure the property. If y<x then you would secure the property if you were the maximum bidder. Both would be true with or without knowing the value of y. Am I missing something? If x<y then assuming x is not ridiculous then there is often a negotiation at which point knowledge of the reasoning behind the reserve may influence the outcome.
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Post by mrclondon on May 15, 2018 18:04:19 GMT
Excuse my ignorance of the bidding process, but I'm unsure as to why knowledge of the reserve price would be helpful in this case. For example, if you intended to bid and you thought it was worth £x and that was your maximum bid with the reserve price being £y then: If x<y then even if you bid the most your bid would be less than the reserve so you would not secure the property. If y<x then you would secure the property if you were the maximum bidder. Both would be true with or without knowing the value of y. Am I missing something? I think its to do with auction psychology / dynamics.
A potential bidder intending to exit at £x (with an unknown higher reserve £y) would make sure they attended the auction, and would probably participate, and might even after watching the dynamics on the day feel it worth bidding slightly over £x.
The same bidder intending to exit at £x (but with a known higher reserve £y) would probably not bother to attend. Without their participation the auction dynamics would be different and it may prove much harder for the auctioneer to drive the price above £y.
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Post by gaspilot on May 15, 2018 18:27:30 GMT
Okay. I think I've got it. It's not really what happens at the auction per se but what might potentially happen before and/or after it. I knew I wasn't seeing the whole picture. Thanks, guys.
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goofy115
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Post by goofy115 on May 15, 2018 22:07:20 GMT
So according to the update FS posted today the flats have been placed into the auction to force the purchaser's hand to exchange contracts.Could placing the development into an auction not have an adverse effect? If the purchaser (if he really exists) sees the development doesn't reach or get anywhere near the guide price then surely he would renegotiate the price? If the purchaser doesn't make an effort to exchange contracts then I can see some sort of excuse made and this being pulled out of the auction for the reason above. It's going to be an interesting afternoon.
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adrian77
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Post by adrian77 on May 16, 2018 7:54:33 GMT
totally agree that placing in auction will flag this one up as a lemon and force the price down. However for the auction to proceed the auction house will need the legal pack which will have to be very quickly organised by FS...
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puddleduck
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Post by puddleduck on May 16, 2018 8:01:24 GMT
totally agree that placing in auction will flag this one up as a lemon and force the price down. However for the auction to proceed the auction house will need the legal pack which will have to be very quickly organised by FS... I use Auction House fairly frequently, so as I'm registered with them anyway, I requested legal packs. Still nothing, so I can't see how this can possibly be in today's auction.
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puddleduck
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Post by puddleduck on May 16, 2018 8:52:11 GMT
Legal docs are now available
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adrian77
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Post by adrian77 on May 16, 2018 9:21:33 GMT
well they weren't an hour ago - this means that anybody with over £1m smackers to shell out will have about 4 hours to read them and take legal advice before the aucion starts. I don't think this will exactly force the price up especially as we all know the reserve
However according to FS the interest owing on this loan is a value between £100K and £150K (capital not given for confidentiality). If we take the capital at 2.4% compound then I get the FS figure - surely the figure they quote is for the original 6 months contract which was supposed to end 26/08/2017. If this sells today and is settled in a month's time the interest will be nearly double this amount? If this sells at reserve then it is going to be very close but should just about give a 100% recovery? As for the second loan - it will need at least most flats to sell at a good price and I just don't see it.
I normally watch Bargain Hunt during my lunch - bonus free edition immediately afterwards today!
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puddleduck
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Post by puddleduck on May 16, 2018 9:39:51 GMT
well they weren't an hour ago - this means that anybody with over £1m smackers to shell out will have about 4 hours to read them and take legal advice before the aucion starts. I can't see any obvious nasties, building control approval is in there, new home warranties, EPCs etc etc When I go to auction, I tend to have several targets and have never get legal advice prior - that could get expensive quickly! Just read 'em myself, and cross fingers Too be honest, if it sells at the guide price, it looks like it'll be a good buy, they are not doing themselfs any favours listing just before with legal packs available on the day - really restricts what will already be a small market I'd imagine.
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adrian77
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Post by adrian77 on May 16, 2018 10:13:56 GMT
The legal pack did not arrive in time for the auction - so well done FS! This means this development is flagged up as a lemon, if he exists then this mysterious buyer has got the seller over a barrel and he knows what he needs to pay! If this buyer does not exist (anything is possible!) then that will probably be a delay of 2 months - one month to next auction plus 1 month to complete!
Is this worthy of an OBE for services to P2P lenders - answers on a digital postcard.
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puddleduck
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Post by puddleduck on May 16, 2018 10:22:33 GMT
The legal pack did not arrive in time for the auction - so well done FS! This means this development is flagged up as a lemon, if he exists then this mysterious buyer has got the seller over a barrel and he knows what he needs to pay! If this buyer does not exist (anything is possible!) then that will probably be a delay of 2 months - one month to next auction plus 1 month to complete! I this worthy of an OBE for services to P2P lenders - answers on a digital postcard. Note that 'the vendor is still wanting to sell this property as practically as possible under auction terms' In other words, it's still available to buy, and I would not be surprised if this is sold prior to the next auction.
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Post by neeeryde on May 16, 2018 14:22:36 GMT
Auction is now live and viewable online. EDIT - As per previous posting, they have been withdrawn and they say that they will be in the July auction.
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snowmobile
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Post by snowmobile on May 16, 2018 14:39:35 GMT
Auctioneer said postponed until July!
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adrian77
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Post by adrian77 on May 16, 2018 14:45:42 GMT
quite possibly but this is now flagged as a lemon so I guess any offers will reflect this - interesting one to follow. Given that FS have revealed the reserve price and also indicated it is a distressed sale by putting it to auction where it was not sold due to ,I guess, their incompetence in getting the legal pack done on time I wonder if the developer has a legal claim against them. If I were in his shoes I would be furious!
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bfish
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Post by bfish on May 16, 2018 15:10:38 GMT
FS Update: Property withdrawn from auction... contracts were(?) due to be exchanged today - deposit sitting in lawyer's client a/c !!!
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