SIMBA and Marika Kugwe thought buying a house at auction was something you only see on TV – until they landed their dream £255,000 first home.
The couple were looking for a more spacious home in Hertfordshire, but on a tight budget there were few listings on the market that they could afford.
According to Rightmove, the median house price in the area has reached a whopping £518,332 – nearly £200,000 more than they had budgeted for.
Determined not to give up on finding their dream home, content creator Simba, 27, and graphic designer Markia, 24, finally hit gold when they saw a three-bed house listed for auction on Zoopla.
Although the couple initially wanted to avoid buying the property this way, they did their research, bit the bullet, and put in a bid.
It was accepted and the couple rushed to pay a £4,800 fee on the property, a 5% deposit of £13,000.
That’s because they were able to find a lender, Nationwide, that agreed to give them a 95% mortgage.
If you’re looking to buy a Homes Under The Hammer-style property, you’ll want to be familiar with how the process works.
Homes listed at auction are often cheaper than similar homes listed on the market – but buyers can lock horns in the bidding wars, sending prices much higher than the starting price .
If you win your home, the contracts are usually signed shortly after – meaning there’s no time to change your mind and you must have the savings.
In addition, there are often additional fees you will have to pay when purchasing an auctioned property that you would not pay if purchased through more traditional means.
Plus, many of the homes listed on auction sites take a lot of work – which means you have to have cash to spare to make it happen.
In many cases, you can’t even visit the house before you buy it, which means you’re not entirely sure what you’re going for.
Simba and Marika’s house is also the upper door, but they don’t mind a challenge.
They are currently renovating the house in stages, saving to make it their permanent home.
We sat down with the two to see how they went from saver to host for The Sun’s My first house series.
Tell me about your house
It was a three-bed house in Hertfordshire.
There are two living rooms, an open plan kitchen and diner, a bathroom, a rear garden and a front driveway.
We’re looking for a house big enough for a family – we’re planning to stay here for a while.
That means we are happy to take a project, build a house and make it a forever home.
How did you decide on the position?
Location is key for us.
We’ve always lived around the area and wanted to be close to where we’ve been all our lives.
We also needed to live somewhere with good links to London in order to work.
The house is listed on Zoopla as an auction property, and we stumbled across it last June.
We avoided searching for auction properties, as we knew there would be extra fees to save like booking fees – and thought it was out of our budget.
But after doing our research, we decided to buy it and place a bid on the house.
How did you buy it?
We really did our research and found ways to save money on our home through the auction site.
For example, it would cost us £11,000 to book a property – but we spoke to the property handling agent and asked if we could negotiate this.
The representative contacted the seller who offered to pay the reservation fee or £11,000 off if we bid on him.
There’s still a week left of the online auction, so we’ve done our research together and come up with a price we can afford.
We placed a bid of £255,000, which was accepted – although it was far below the listed starting bid of £265,000.
We got the impression that the seller wanted to sell quickly because he was struggling to find a buyer – hence why it was listed on the auction.
There are some fees that we have to pay extra.
We paid £300 for the buyer’s auction package, which included all the legal papers for the house.
A maintenance fee of £4,800 was paid upfront, which was taken from our 5% deposit of £13,000 for the house.
We finish in December 2021.
How much did you pay for it?
We paid £255,000 for our house.
Our mortgage repayment is £944 a month.
We borrowed £242,250 for a term of 35 years with a two-year fixed rate of 3.09%.
We had a bit of trouble getting a mortgage at first.
Lenders seem stricter when agreeing to lend money to auction properties.
Our first application was rejected, and then the second time we applied, a surveyor came to the property and said it was uninhabitable, which means the bank has refused to lend us.
We then decided to hire a mortgage advisor who specializes in dealing with auction property buyers.
They helped us apply for another mortgage with Nationwide – and around that time it was approved.
How did you save for it?
We first started seriously saving for a house a year and a half ago.
To track our savings, we followed the budgeting rule of putting 25% of our monthly salary into savings for a house, 20% on repairs and an emergency fund, and the rest of the cash – the remaining 55% – is for our bills and outgoings.
That means we have to spend at least £1,000 a month on the cost of buying and repairing our home.
We then review our bills to see if we can save any more.
We froze our gym membership, freed up £50 a month and closed the Netflix account, which banked us around 10ner a month.
Plus, we made a conscious effort not to drive a lot. We’ll be sharing lifts together as much as possible instead of taking our own cars everywhere – that has saved us around £160 on fuel a month.
We also have a piggy bank where we keep all the spare change for a year.
In the end we counted it and we saved £150.
We save our own deposit – we don’t get financial help from family or friends.
We also set up our own business, Sloag, which in its first lockup raised £3,000 for a deposit.
We make our own art, clothes and prints and sell them.
It’s been great helping us fund the renovations – for which we are budgeting around £20,000.
Advice for other first-time buyers?
Never be afraid to ask questions if you’re not sure how the auction process works.
We know nothing and make sure we find out all the information we need by talking to the experts.
If you’re someone who panics easily or isn’t able to deal with pressure, we wouldn’t recommend buying a home through auction.
Be sure to find a mortgage advisor who works with auction properties who can advise you and guide you through the process.
This is how a couple buys a The house is worth £340,000 with a small deposit.
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https://www.thesun.co.uk/money/17524096/we-bought-first-home-auction-deposit/ We bought our first house worth £255,000 through an auction