Week 40: Auctions and Amsterdam
...Hallo, ik hoop dat je een goed weekend hebt gehad…
Translation: “Hello, hope you had a good weekend” in Dutch.
I am not planning on relocating to Amsterdam but took a fascinating trip there over the weekend. Done a lot of sight-seeing as you do (weather permitting) with lots of musical venues and cafe culture thrown into the mix. It did feel like I was back at school with a 10pm government curfew. Horrible peeling yourself away from the music scene but my group and I did book into an Airbnb as opposed to a hotel so that took care of the ‘after party’. Property investors are regular people and when we're not working we like to wine down too. It was fun but the hardest part was trying not to get knocked over by a cyclist, hahaha. The Dutch are big on cycling and although the UK has a passion for the sport the Dutch have clearly excelled in that realm. During my escapade I couldn't help but wonder why there was not a single vagrant on Dutch streets? Unless I'm missing the point, they are either a very established society or us Brits are just lagging behind and why am I not suppressed? I'm not a travel journalist but would love to do a piece on this. However, no point airing our dirty laundry in public as we are probably the least liked ( tourists) in most major destinations and this will only add fuel to the fire. But on a positive note I really enjoyed my time there and will totally recommend a visit.
Anyway, back on my soil and as promised from last week I did mention I will talk you through what happens when you press that green button on your screen during an on-line auction. Congratulations! as you made the final bid so this makes you the rightful owner of your new purchase. You will then be greeted with a confirmation email from the auction house detailing the particulars of your purchase. This is an automated response so you don't have to do anything but just smile as you've made a wonderful purchase and this is where all the fun starts and things really begin to unfold. Contrary to what you heard you don't have to pay anything just yet as I was under the impression that as soon as the hammer goes down you pay the deposit and the countdown begins. The auctioneers will have your offer and pass this over to compliance to run their checks. All this can take up to ten days and not just a couple as I initially thought.
This is refreshing to know as those who are new to this, be rest assured that you will have a few days to gather your thoughts and that the auction house won't have you at gunpoint to cough up the money hahah. Auction sales are set to a tight schedule usually 30 days, so will have to submit all your paperwork, get it approved and finalise the purchase by then. It is a steep learning curve and given the time frame one will have to work swiftly to meet this dead-line. Now I know all this sounds quite daunting but rather than dragging this process to three months (which is a typical sale) at least this way you're compressing all this into a single month and reducing your overall time on the project. As investors you just want to ‘get in and out’ as quickly as possible and move onto subsequent projects. In a nutshell if its speed you're after then auctions are the way to go.
Now, for the finances you will have to pay the auctioneers fee which is usually around £1250 but can differ depending on which auction house you are with. You will also pay a 10% deposit of the purchase; example; if the property is £100,000 then you will pay £10,000 at this point together with the above fee and the rest of the balance due (£90k) by the end of the month. This could be from funds which you have either saved or borrowed; all of which must be declared and traced for the purpose of anti money laundering. Your financier (bridge/bank) will arrange for their valuer to go out to carry out the initial surveys on the property. Now you can go there yourself and meet them at a pre-agreed time or arrange for a Zoom meet-up. Once this is passed together with any signed paperwork you will now be able to bring your sale to a close provided it all goes smoothly. In the too and fro process you may have to send additional paperwork if there are more parties involved. Simultaneously, get your legal packs completed and sent back out to the solicitors, you will be juggling various tasks with a few professionals here.
Tip: send everyone everything they want asap as time is of essence and any submission of sloppy paperwork will just result in them returning it back. So try to do it right in the first instance.
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Tip: finally, try not to get disorientated as everyone will be asking for money at more or less the same time. Instead, compose yourself and calmly make those payments. If you have any questions this will be a good time to ask.