House Builder in administration .... bargain to be had ?

TheGingerNinja

Hi,

A local builder in our area has gone into administration.
Although the development they were working on is finished the showhome was never sold. It was on the market for nearly 2 years at 250k.

I am interested in the house if I can get it cheap enough....

My question is ......

Who's is the house to sell ?

I have spoke to the administrators who said I would have to email them with any offers for the house. They told me that I had been the only person who had expressed any interest so far (the company has been in admin for 6 weeks).

Anyway... I sent them an email with an offer of 150k. I just want to know who's decision It will be to sell and for what price.

Thanks

Reaper

Their job is to convert as much of the business into cash as possible so as to pay off its debts and shareholders. I would expect an auction to be the obvious thing to do as that way they can't be accused of selling it off for less than it's worth. However I'm guessing if your offer is not too far short of what they are hoping for they might accept to speed things up.

EDIT: Actually there is a difference between Administration and Liquidation in that Administrators look first at the possibility of selling some or all of the business as a going concern. Only once they give up on that will they will sell off what they can for what they can.

TheGingerNinja

Reaper wrote: »

However I'm guessing if your offer is not too far short of what they are hoping for they might accept to speed things up.

Hmmm I've offered 100k less than what it was on the market for so maybe auction will be the likely outcome

Thrugelmir

Do you think that your offer is realistic? If its too low they probably won't take you seriously and auction it.

TheGingerNinja

Eh....

If I'm really honest .... 150k is a very low offer for a house which was on sale for 250k. But no one will pay 250 for it. Even at 200 it's still a very good buy.
My feeling is they would go to 180 but as I say... if you don't ask.

Thrugelmir

TheGingerNinja wrote: »

Eh....

If I'm really honest .... 150k is a very low offer for a house which was on sale for 250k. But no one will pay 250 for it. Even at 200 it's still a very good buy.
My feeling is they would go to 180 but as I say... if you don't ask.

True. The administrators will want to wrap matters as quickly as possible and will not waste their time. Personally I would ask a couple of EA's for an informal valuation and offer around 85% of the lowest.

TheGingerNinja

Thanks,

I live in the same development as the showhouse...

My neighbours house was valued at 170k but they had to sell it at 148k to get rid of it.

So it the showhouse was 250k in today's market .... 210K ?
85% of 210k around 180k ?

Maybe 150 will be a bit low !?

socrates

Offers are all good but what is the valuation and will it have the 10 year builders insurance - without that no chance of a mortgage

TheGingerNinja

I would guess the valuation to be somewhere around 220/230k

Like my house (on same development) it will have a 10 year warranty with Zurich... i think

socrates

TheGingerNinja wrote: »

I would guess the valuation to be somewhere around 220/230k

Like my house (on same development) it will have a 10 year warranty with Zurich... i think

Guess and I think unfortunately are not good enough

Valuers err on the low side at the best of times let alone with new builds.

I guess what I am saying is get a good solicitor to look into the small print and do not forget once you have put your offer in they will be obliged to advertise it in the local paper to get the best possible price.

You may end up spending several hundred pounds to get nowehere.

However the idea is a very good one

Thrugelmir

socrates wrote: »

Guess and I think unfortunately are not good enough

Valuers err on the low side at the best of times let alone with new builds.

I guess what I am saying is get a good solicitor to look into the small print and do not forget once you have put your offer in they will be obliged to advertise it in the local paper to get the best possible price.

You may end up spending several hundred pounds to get nowehere.

However the idea is a very good one

The reason I suggested getting a valuation from EA's. Is that some years ago bought a showhouse on a development. The third party valuer came in at £27k less than the selling price. As discounted all fixtures and fittings , kitchen appliances, garden landscaping ( garden was on slope and had a few tonnes of boulders to create tiers). So took a bit of thrashing out to arrive at an agreed price.