Repossessed properties and what to offer in the current climate

geoffky

i think you are taking on far too much risk and that will be your downfall.....wake up...

mrsjanejane

I know what some people are saying about the risk and I am awake. Like I said I have to relocate and won't be coming back to my current County. Whatever happens I have to rent my place (this feels like the biggest risk to me). I can go buy as I have a 15% deposit and that is why I am talking about offer prices as I have heard if you go in way to low or keep making offers EA's don'y take you seriously. My dilemma is that if I have to end up paying £750 rent in my new location or do I try and get this house and the mortgage is £780. I won't go over the £200 mark as that is stretching me and it would be silly in this current economy. At £180 I would be paying similar to what I am will have to rent for. Assuming I got it at £180, it allows me to relax for a short while as that is 18% ish off the asking price, allowing for the property to drop later as it will. Like I said before I will drop mine by 20k but if it still does not sell, I have no choice but to rent it out until it sells later. I know that it means two properties losing money that is why I am working out a percentage of what I should try to get off of any property that I put an offer in for.

Need to buy/rent in new location not through choice. For personal reasons I would be stupid to stay where I am living at the moment.

GDB2222

scottburke wrote: »

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.

Were they new 18 months ago? New houses tend to go for a sizeable amount more than secondhand houses (which both of these are now). They also usually include incentives (new carpets/appliances/stamp duty paid etc). I can believe that you are getting the house at a realistic current value, or even a smidgeon below, but not massively below.

Can you think of any realistic reason why your vendors would sell to you for a substantial discount below today's market price? Bear in mind that their borrower probably had indemnity insurance and the insurers will expect the price to be maximised. They are under a legal obligation to their borrower to get a fair price. Standard procedure is for them to have two surveyors' valuations, and they won't sell for less than those valuations.

I can't speak for your particular purchase, and on the face of it it looks quite good. However, you ought to ask yourself the above questions. You'll feel foolish, surely, if the one currently on for £279k eventually gets sold for £150k.

Ewarwoowar2

Bit of insider info.

I work in a firm of solicitors. One of our main departments is the insolvency department. They are waiting to be paid for loads of work done over the last six months. What's tying up payment is the sale of repo'ed houses and businesses. One of the main accountants/IP's we work with haven't sold a repo'ed house for months (April).

Everyone's getting very twitchy. No sale, no pay days for the solicitors, IPs, accountants working in insolvency.

It's all right at the moment, because we're relatively near the start of the financial year. They've already been lowering the prices they'd accept. However, over the next sixth months as the number of houses on their books increases, targets and end of year loom, they'll be selling the repo'd houses off for peanuts.

For example, one pay day rests on a house valued at £300,000 last year. In April, when it was repo'd they wanted £260,000. Now they've reduced the asking price to £220,000 and no one's biting. They were talking about accepting any offers over £150,000 on Friday just to get some money moving.

Gangstabird

mrsjanejane wrote: »

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.

Go in with your quote. If you are not in a chain, it will be one of the top offers and the EA will have to get back to the bank on it. But if you can proceed then they would normally accept it.

mrsjanejane

A month ago when I had a discussion with the EA he siad the bank will only take about 10k off. At this time I had not put an offer in and was just sounding him out and he knows that. Also my concern with this property is that an seventh of the tiles are missing on the roof and the property is sold as seen which is fine but this has been like it for a while and I was wondering if eventually the felt will give in to the rain as there is no plastic sheetiing protecting the felt until the tile go on. When I viewed it two months ago it had not affected the room below. (A full survey will pick all of this up)

Ewarwoowar2, even though banks are willing to let it go for less, what you are saying is that they are still not getting the buyers most of the time? (within your company). That was a great insight from you, thank you

Ewarwoowar2

mrsjanejane wrote: »

Ewarwoowar2, even though banks are willing to let it go for less, what you are saying is that they are still not getting the buyers most of the time? (within your company). That was a great insight from you, thank you

Yes, up until the last week or so, everyone's (banks, accountant, insovency practitioners, etc) have been holding out for a decent price, perhaph 10% off peak prices.

In the last week or so, everyone's getting twitchy. I predict, in the next 6 months, reality will bite and repo'd houses will be sold off for 50% of value (which they are not, at the moment, according to the people I work with).

mrsjanejane

So with your company they are experiencing the 10% drop only. What you are saying is that they might start reducing their prices now because of the house price drops to come? I guess that your company will start to see the reductions soon then. How does it work then, you put an offer in to the Estate Agents and they go back to the banks and it is then that a company like yours sees the reduction once an offer has been accepted and the legal stuff starts?

Cheers

mrsjanejane

I guess for companies with repo's, it does not help with the comments from Alistair Darling last week about the economy

geoffky

Its about time most people were told a bit of truth i think....the debt in this country is unbelievable and that poses the worst problem to us ALL...