Homes Under the Hammer buyer exposes secret auction problem viewers never see
EXCLUSIVE: Property developer Jordan Robb, who recently appeared on Homes Under The Hammer, has laid out the pitfalls for those looking to buy a home through auction.
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A property developer who has featured on BBC's Homes Under The Hammer has explained why the auctions, beloved of the show, may not be the best option for those trying to get on the proerty ladder and buy their first home. Jordan Robb featured on the BBC daytime property show back in May when he transformed an uninhabitable house in Dunfermline, which initially had a guide price of just £5,000.
Jordan purchased it for over ten times the guide paying £52,000 and spent slightly over £20,000 renovating it bringing his spend to around £72,000. His work wasn't in vain as the expert employed to value the property estimated it could sell for £85,000 to £95,000 although Jordan was going to rent it out and already had a tenant in place.
Having purchased his first property 14 years ago in 2010 at the age of just 19, Jordan knows his way around the auction process. While it may appear on shows such as Homes Under The Hammer that there are bargains to be had if you are prepared to put in a bit of elbow grease fixing a proeprty up, Jordan says the process isn't that straightforward.
"I don't know how many properties have bought over the years 50,60,70. I bought a few commercials [at auction but] in terms of residential I'm pretty I've only bought that one [on Homes Under the Hammer] at auction. As soon as you're the highest bidder and the hammer falls that's you effectively concluded and you can't get out of it.
"In normal circumstances it goes all the way to the end of this sort of legal process and you can pull out anytime toward the very final moment but it's different at auctions so you've got that issue.
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"So if you do all that and go through the process and all of a sudden find out there was maybe some sort of issue from a legal perspective...." he says ominously.
"I've had one before for example [where] you couldn't get a mortgage on it because the title deed wasn't drafted up correctly. There was an error in terms of the date but I knew that so I used it as part of the negotiations to buy this property.
"However if it was an auction and you buy that property and then find out down the line that is a problem. You just don't know with auction properties.
"And if there is a there is a problem and you have to pull out then you lose your 10% deposit plus whatever the auction fees were," he continued.
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"Plus if a property then resells at a lower value, it doesn't always happen, but there is a chance they could come after you for that [the difference]. So that's kind of where the risk lies and it puts homeowners off," he concluded.
Jordan admits he was always more interested in getting into business than anything else.
He toyed around with a few different businesses before meeting someone who was able to help him with his first steps in the property investment game.
He now runs Robb Properties (Scotland) Ltd, which operates in and around Edinburgh.
