Repossessed properties and what to offer in the current climate

mrsjanejane

I am interested a house that has been repossessed. I really like this house (on for £220k -just dropped from £230) it needs about 30k spent on it. I was thinking of putting an offer in for 40k less because of the current market as I know prices will drop and my price really reflects me trying to protect myself from losing value to a certain extent.

How much have people offered less recently for repossessed properties in the current market?

This house has been on sin Jan 08 with various estate agents and the only one took it over 2.5months ago as the house got repossessed.

What do people think?

I don't want to negotiate with the EA as I want to go in with an offer showing that I can proceed straight away as I have nothing to sell and a mortgage in place. I don't want them to think that I am a time water by keep upping my price.

bubblesmoney

i offered 135k on a repocession advertised at 165k (later down to 149950 a few days after my offer). probably needed 5-8k work at teh most. they rejected the offer but EA indicated if i could up the offer a bit, i didnt up it and moved on another property that didnt need much work for 135k (but didnt have garage conversion or small conservatory). think could have got it for 140-145k as i knew they wouldnt agree for 135k. but didnt make any further approaches as i wasnt interested in the work involved as i wanted to move in quick. (both properties are 4b detached properties 6.5y old)

another property 4b (conservatory + 2 reception rooms) semidetached repocession advertised at i think 110-115k if my memory serves me right but needed 20-25k work done and EA was keen on even silly offers as vendor was keen to get rid of it. EA knew i would offer around 60k even if i made offer as we discussed the issue and EA was keen on me making offer. if i had made an offer it wuld have been somewhere around 60k but i wasnt interested due to the amount of work involved.

another 3b detached in my area where EA said vendor needs to sell priced at 159k EA gave indications seller would seriously consider my max price of 130-135k. but i wasnt interested as was lookng at 4b detached houses for similar prices. i missed out on a couple of other houses detached 3b which went for aroud 120-125k i think in much better locations as started looking at repocessions quite late. 3b flats in places like leeds i have seen sold for 70k.

so unless the repocession is very agressively priced then dont make a move on it, there are lots of houses out there, try to get the best bargain that u can. and bargains are not necessarly in repocessions, there are bargains in vacant properties / part exchanges with builders up for sale / houses near new build developments where there are lot of empty properties in new build, the prices for houses around the new development will be a lot cheaper if they have been on the market for a while and need to sell. and play the EAs against each other when they ask for feedback on the house u viewed, give honest feedback and compare to other vacant properties in the area. after my feedback i have seen atleast 1 place slashed by 15k in a couple of days and EA indicated they might be willing to drop more but i wanted then to drop by 15k more which wasnt acceptable to them. no worries as i found another acceptable property.

what ever u do, if u make the mistake of falling in 'love' with a property then be prepared to pay over the odds for the love factor. tell the EA u just want a reasonable house with cost being most imp factor then u r more likely to have a strong hand in bargaining. if going with family then make it clear to all family members before viewing, not to make gushing comments about the house in presence of EA / vendor or even neighbours etc.

another tactic worth pursuing is to inform EAs about your max budget (inform what u want the EA to think is ur max budget and not the real budget) and ask them to find suitable properties. very often u will find that they will ask u to view properties priced much higher than ur stated price, then make an offer for ur max stated price if u think it would be a bargain at that price. ahve atleast 2 properties in mind preferably with same EA and make similare price offer on both so that EA gets the feeling that the price u stated is ur max and that u are not particular on one property but willing to make compromises if the price is suitable to you. that way u r more likely to get bargains. but if u r after a dream property then this tactic will be useless to you. make it a point to show the mortgage approval in principle and also adeq funds for deposit and have a solicitor sorted and their contact details at hand when u make the offer in person so that u r there when the EA contacts the vendor. if they refuse offer then dont show disappointment. have another property shortlisted (with same EA) and immediately ask for viewing for the other property with similar sort of price in mind. if the EA thinks vendor who rejected you might reconsider and that u r a serious buyer then they will speak to vendor after u leave and if this work in ur favour they will get back to you ASAP.

remember a 1000£ saved in purchase price will be worth atleast a 2000£ factoring in mortgage costs (most probably depending on how ur mortgage is sorted). so haggle hard and be prepared to lose out on a property and settle for another if u want bargains. factor in the risks of negative equity if buying in a falling market. best of luck

ps: posting a rightmove link to the property might get u more reliable comments. but could increase eyeballs on the property or even offers ! see if putting a rightmove link is ok with u. remember there are loads of bargains out there, so i would not worry about losing a dream house (but then i wont fall in love with a property, you can make a happy home anywhere, it is u that makes the home and not the property that makes the home)

GDB2222

mrsjanejane wrote: »

I was thinking of putting an offer in for 40k less because of the current market as I know prices will drop and my price really reflects me trying to protect myself from losing value to a certain extent.

There's no protection involved, as they are going to want today's market price. If prices fall say 25% over the next 2 years, you'll be able to buy a similar repo for 25% less. Nobody is going to accept 25% below current market price, so save your money and come back in 1 or 2 years time.

Running_Horse

GDB2222 wrote: »

There's no protection involved, as they are going to want today's market price. If prices fall say 25% over the next 2 years, you'll be able to buy a similar repo for 25% less. Nobody is going to accept 25% below current market price, so save your money and come back in 1 or 2 years time.

Presumably the opposite also applies; if prices were rising, the OP would be happy to pay 25% more than the asking price because that's what it will be worth in 2 years time? Some people seem fixated on repossessions, now now now.

Generali

Running_Horse wrote: »

Presumably the opposite also applies; if prices were rising, the OP would be happy to pay 25% more than the asking price because that's what it will be worth in 2 years time? Some people seem fixated on repossessions, now now now.

That's how illiquid markets work. People offer to pay above 'current' market value today if they think prices are rising so they can 'get on the ladder'. They seek to pay less than 'current market value' if they think prices are falling.

mrsjanejane

I did not know that it was a repossession as I went to view it earlier in the year and for what the guy was asking and the work that needed to be done, I was not interested in even putting an offer in much lower as I could not afford it(obviously rightmove pictures did not show all of the work needed). It was dropped by 30k went it went for repo but after speaking to another agent and describing the 4 bed house condition and they know the road, he said about £220-225 without looking at it. With my budget offering a lower price I could afford the property, but maybe I should wait as the market will drop. There has been no interest in the property. When it was on at 230 someone made an offere of 220 but then pulled out but straight after the EA lowered the property price to that person's 220k and there has been no interest for just over a month now. A similar property with 1 bed less was at £235 in Jan then in June dropped to £220, then £215 and now at offers in excess of £199. It is just that want to relocate and I think that renting has to be an option for me now as my buyer pulled out of my property. However, I have permission to let to buy for my current house so I can get another mortgage so I go buy if I need to but obviously I will still have the other one but as soon as I can sell it I will.

GDB2222

Generali wrote: »

That's how illiquid markets work. People offer to pay above 'current' market value today if they think prices are rising so they can 'get on the ladder'. They seek to pay less than 'current market value' if they think prices are falling.

That's fair enough.

However, the figures that go into the current house price figures are the actual sales going through. So, there is a benchmark to assess current market value against. I agree that a forced seller of a repo may have to take less than that current market value to get a quick sale, but only a few % less, not the 25% less that is required to protect the OP against likely future falls.

GDB2222

mrsjanejane wrote: »

It is just that want to relocate and I think that renting has to be an option for me now as my buyer pulled out of my property. However, I have permission to let to buy for my current house so I can get another mortgage so I go buy if I need to but obviously I will still have the other one but as soon as I can sell it I will.

Are you totally bonkers? Off your rocker? Bananas? Insane? Lunatic? Financially-illiterate? Foolhardy? (I'm developing RSI, so I won't go on.)

Let's get this straight. House prices are dropping at 2% a month at the moment. So, that's £4,000 a month on a £200k house. You are already saddled with one house that is depreciating at that rate, which you "can't sell". And now, your lenders have "given you permission" to buy another one, so you can up your monthly loss to £8,000. Do you always do what they tell you?

mrsjanejane

I am in a position where I have to relocate whether I rent or buy but I do want to settle in the new area. Unlike some I can not sit and wait in the area that I currently live so it is unfortunate that I have to relocate in the current housing situation. I will speak to my EA tomorrow anyway about dropping my property by 15k allowing for another 5k for an offer reduction(so I drop by 20k anyway(at least I can then put my equity in a savings account and it actually makes some money and then buy in a year). I am willing to do this so there must be others out there who are forced for whatever reason. Whether I get a new mortgage or not I have going to have to rent my property out.

This particular house that I am interested in is the right size and right location but like some people say it is not the end of the world if I do not get it.

This post was about asking people how much below the asking price have you put in and been accepted for?

lincroft1710

It doesn't matter what anyone else has offered on a repo, and whether or not it was accepted. What matters is what YOU think you should offer bearing mind how right house is for you (size, layout, location etc), what you can comfortably afford to repay as mortgage, and how easy it is for you to finance remedial work and how stressful it will be while it is being carried out. Looking at figures you quote I would be less generous and max would be £170K, you can start offering well below this - as someone said on these posts "if they don't wince, you've offered too much".

scottburke

GDB2222 wrote: »

That's fair enough.

However, the figures that go into the current house price figures are the actual sales going through. So, there is a benchmark to assess current market value against. I agree that a forced seller of a repo may have to take less than that current market value to get a quick sale, but only a few % less, not the 25% less that is required to protect the OP against likely future falls.

this is not exactly true. we went to view a house few weeks ago. EA informed us it was a repo. up for 255k. just been lowered from 269k. liked the house but was just looking round abit before we took the plunge. EA rang us back two weeks later to say repo company wanted it of there books and an offer in the region of 200k would secure the property, if we were interested!!! exact same house up for normal sale over road for 279k with same EA. checked on nethouseprices.com both house bought for 320k 18month ago.