I bought house on Homes Under the Hammer & transformed it for profit – there’s a harsh reality producers DON’T tell you
A DEVELOPER who bought a house on Homes Under the Hammer before transforming it for profit warned viewers that there is a harsh reality producers don’t tell you.
Jordan Robb impressed fans of the long-running property show with his extensive experience in the business.
The contributor made his first investment at the tender age of just 19-years-old, and he’s now spilling the secrets of the trade.
Jordan featured on the hit show back in May when he transformed an uninhabitable house in Dunfermline, Scotland.
The house initially had a guide price of just £5,000 but Jordan purchased it for over ten times the guide paying £52,000.
He spent slightly over £20,000 renovating it bringing his spend to around £72,000.
However, his work wasn’t in vain as the expert employed to value the property estimated it could sell for £85,000 to £95,000.
Despite his success in the property game, Jordan said there was a harsh reality that producers don’t tell you.
He admitted the process in the market is nowhere near as easy as the BBC show made it out to be.
Jordan said: “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.
“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 tails off ominously.
He added to The Express: “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 per cent deposit plus whatever the auction fees were.”
Jordan warned that if a property resells at at a lower value, there is a chance you might pursued for the difference.
The developer said that the risk involved with auction properties could “put homeowners off”.
On the show, he transformed a previously “uninhabitable” house where the guide price sat at only £5,000 to an unrecognisable state.
The TV contributor previously admitted that people often do not consider the supplementary costs that come with rental properties.
He said: “What they don’t realise is right away your mortgage is maybe a few hundred pounds.
WINNING BID A REAL RUSH
CAROLINE Duddridge and her partner Paul Jones have bought three properties at auction.
They paid £26,500 for a three-bedroom terrace in Wales in 2011. They rented it out for £400 a month then sold it this year for £60,000.
Caroline, 63, a retired teacher said: “You need to do your homework and know what you are buying – we didn’t want anything that was structurally unsound.”
She and retired police officer Paul, 64, from Cardiff, bought two more properties in 2016. They paid £36,000 for a three-bedroom terraced house, and after painting it, putting in new flooring and clearing the garden, it sold for £55,000.
A larger plot was bought for £185,000 and later sold to Transport for Wales for £250,000.
Caroline said: “We are thinking about doing it again but auctions are more popular now and I’m not sure you can get bargains like you used to.
“The auction itself is very exciting. When you are the winning bidder, it’s a real rush.”
“Then you’ve got all your running costs. Things people don’t think about is you’ve got your insurance on the property and other expenses.
“You’ve then obviously got your margin for all your repairs and maintenance, you’ve got to find tenants who will pay, you’ve got vacancies in between tenancies and stuff like that.
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.
How to buy at an auction
Speed is one of the great appeals of an auction.
For the seller, it means they may have to accept a lower price than if they sold through an estate agent, but they should get the full amount within 28 days.
For a buyer, an auction removes the risk of being gazumped or having to go to sealed bids.
However, many buyers think they will get a bargain at auction, but this is not always the case.
How to Prepare
- Make sure you view the property before buying it. If you can’t get to the property, many agents offer virtual tours.
- Do your homework and be sure to read the legal pack or pay a solicitor to read it.
- It is easy to get carried away on the day, so set a budget of what you think the property is worth, and stick to it. You will need to register in advance. This involves providing basic details and going through an identity verification process.
- Sort your finances before the event. Most buyers at auction pay in cash. You might have the money from a property sale or inheritance. Others use a bridging loan — a property loan for a short term — but these are expensive.
- Once the lot is sold, completion is typically within 28 days. By comparison, a traditional house sale can take 100 days or more.