Auction or try to sell in an estate agent

[Prospero]

During the last year or so, the mental health has deteriorated of the neighbour to my rental property. Two tenants have moved out due to the noise made by this person. After the first tenant moved out last year, I tried to sell the property, but the buyer withdrew when they heard that my neighbour was noisy. I’ve never heard any noise when I’ve visited and so let it out again when the sale collapsed. This tenant has asked to leave after 3 months due to the noise and disturbance caused. I can’t risk letting it out again. I’m thinking of auctioning it and a company has offered to do this for me - saying they would pay me £180000- about 40k less than asking price I was offered last year. Alternative is to try and sell via estate agent making clear that there has been a dispute with the neighbour due to noise. I am not sure if I will manage to sell. Property is in a popular area and would normally attract a lot of interest. Any advice?

[Hudson01]

First question and possibly one of the most important - Does the neighour own the property or rent it ??

My advice to you if they own it would be to consider accepting the offer, if it is rented then i would contact the LL and offer him or her £5,000 to evict them, thus adding £35,000 to the property price you would have considered accepting ...... If you can get it for less than £5k then all is good.

Outside the box thinking maybe but the situation you are in can only get worse, mental health is not an easy problem to solve, and if he rents then it's simply not worth you trying.

[Prospero]

Thanks - next door is unfortunately the property owner. I think for my peace of mind I will need to auction . Is it best to go via one of the sell your house for cash companies or approach an auction house myself?

[Hudson01]

It will not hurt to obtain a valuation from the '' we buy any house '' brigade, maybe skiping over any mention of the mental health patient living next door. The auction house can discuss with you what reserve to set and then decide, i may lean more towards the auction as it really is over and done on the day.

[doobrey]

I’m thinking of auctioning it and a company has offered to do this for me - saying they would pay me £180000

I don't really understand what you/they are proposing. Is this an auction, or a sale at 180k? At an auction, the price isn't set until it sells.

[Hudson01]

Although i have never purchased a house at auction i understand that like any auction you would still set a reserve or it could sell for the price of a Latte.

[Lawcruncher]

"a company has offered to do this for me - saying they would pay me £180000- about 40k less than asking price I was offered last year" sounds like: "We will buy the property for £180000 and before the ink is dry on the cheque will have sold it to someone else for £220000."

£40000 is a lot to forego. There has to be a better solution..A sale by auction may be the answer. There are always people who buy at auction without asking questions. However, "let the buyer beware" is not as clear as it once was. Consult a solicitor as to what you would need to disclose in the auction particulars of sale.

[jpucng62]

In this market I would definitely be trying to sell through an estate agent. Unless you are in a legal dispute the noisy neighbour does not need to be mentioned. The market is so hot now, that if you market it at a good price I am sure it will sell. If you go to auction I think you will lose a lot of the value.

[Lawcruncher]

Unless you are in a legal dispute the noisy neighbour does not need to be mentioned.

I think she probably does.There has been a change in the law since I stopped doing conveyancing. My understanding is that today you must disclose anything likely to affect a buyer's decision to proceed. However, I have no practical experience of how the law works in detail and that is why I suggested that Prospero should speak to a solicitor.

If you go to auction I think you will lose a lot of the value.

How Prospero proceeds has to depend on a lot of factors. The person to advise is an estate agent. He does though need to speak to one who is not going to suggest a lower price so that he gets his commission quicker. A distinct advantage of an auction is that many buyers do not take legal advice. The successful bidder is fixed with notice of everything you have disclosed.

[Flashback1966]

Auction houses will set their reserve lower. I don't know if you need to declare to auction houses potential problems. You could always put in with an estate agents and then declare the problem. May be someone desperate to get on the housing ladder will put up with the problem.

You will face capital gains tax on sale. So you will be unlikely to be able to buy a similar property of same value in the area. Depending on the tax status it is a hit of 18% or 28%. In which case, it is probably a good idea to exit the rental market.

Another option, I usually tell people to avoid leasing a property to the Council, but this is one situation where you could. You need tell them of the issue. Make sure you video the condition of the property and get a lawyer to go through the leasing agreement. We have not had the best experience with the leasing schemes. They may put a problem tenants in your property.....

Your neighbours are not going to be happy with you or your neighbour.

[Hudson01]

They may put a problem tenants in your property.....

Your neighbours are not going to be happy with you or your neighbour.

Nice one !! It would be like throwing a piece of Potassium into a bucket of water .............It is something to consider but as said, it does have its own issues. If you were going to sell in the next few years anyway i would still go down the auction route.

[Prospero]

Thanks for all the advice. It was a ‘we sell your house for cash’ company who has suggested I could auction it ar £180000 and they would then keep any money over that amount. I could put a reserve of £175000 but I still need to provide the Property information form and will have to declare that the tenant has complained to the council so not sure this will help me sell any easier than on an open market. I had thought about allowing the council to let it out. If there are problems with the neighbour which continue maybe they would step in more to deal with issues if they are responsible for letting the property . Not sure the neighbour will move unfortunately .