What are the cons of buying a repo?

sarah_elton

OH and I are STRing (hopefully completing on the sale on Thursday). We'll probably be looking to buy in about a year.

Now, we're watching the market in the area we're moving to already, and the odd repo is coming on the market every so often. So we're wondering whether to consider these next year. Right now, there is a 6-bed detached repo on at the same asking price as a 3-bed town house and a 3-bed link detached on the same small estate. :eek:

From what I've read on here, pitfalls I can see are:

1) Stressful process - must complete in 28 days. Shouldn't be too much of a problem as we'll have nothing to sell and will be very organised with mortgage company/solicitor. If my sale goes through we'll have gone from offer accepted to completion in three weeks and two days.

2) Can be gazumped very easily since the house stays on the market - need cash to increase offer if need be

3) Can't test elec/gas/water before completion - need money aside for repairs if required. At least going from rented we can have an overlap on the properties and have everything checked before moving in.

4) Related to above, can you even get access to have a survey done? If not this would be a deal breaker for me.

Anything else I've missed? As I said, just wondering whether we should consider them when looking to buy, given the potential savings involved...

I do also have cold feet about buying a repo as our long term family house as I feel like it would have bad karma because the people before got into trouble in it.

poppysarah

You could have a survey but if it delays your mortgage ...

Assume everything needs fixing and offer accordingly. But your mortgage company will want a survey ...
Doesn't matter if you're very good at harrassing them - the mortgage company will work at it's own speed.

Abbafan1972

I would personally be wary of buying a repossession, not only for the bad karma etc, but I would be worried about potential attacks from the previous owners.

m_13

We exchanged on a repossesion yesterday. Search for repossession in the forum search and you'll find a few threads I've posted on the topic.

We've bought a repossessed BTL so the person it was taken off never lived there and the tenant was given proper notice. I believe this is why it's in good condition as they wanted their deposit back!

Gazumping is a problem if you buy via an estate agent but not if you buy through an auction as you exchange on the day. You can also buy unsold properties through the auction via private treaty. More risk of gazumping then but more flexibility on exchange (completion usually 28 days or less though, although some are 6 weeks).

Services can be an issue but usually the property has been moth-balled by a professional company who drain everything down, disconnect it and secure the property. I've never got any problems I've had sorted after completion in any property I've bought. Not even when we found a fridge full of insulin, a garden full of washing up (including half eaten weetabix welded to the bowls) and a gas boiler that had no vent to outside! The price should reflect the uncertainty.

Surveys aren't a problem usually and there are typically block viewings when you can eavesdrop on other people's conversations and recognise if they are being nosy or are serious and will be competition.

One of the things you have forgotten is fees. We've seen quite a few repossessions lately where the mortgagee in possession is trying to recoup costs via the contract. Even one where they expected a payment of around £2,500 on completion to pay for the HIP, searches and EA costs!

zaphod_beeblebrox_2

Abbafan1972 wrote: »

I would personally be wary of buying a repossession, not only for the bad karma etc, but I would be worried about potential attacks from the previous owners.

I disagree, most people being kicked out of their 'home' (for want of a word) are happy to turn their backs on a bad experience and run a mile, especially BTL's

They may drive past in the future and take a peak at what’s been done with no grievance thing against the present owner/occupier

sarah_elton

m_13 wrote: »

One of the things you have forgotten is fees. We've seen quite a few repossessions lately where the mortgagee in possession is trying to recoup costs via the contract. Even one where they expected a payment of around £2,500 on completion to pay for the HIP, searches and EA costs!

!!!

Didn't know about that - do they usually tell you about this in advance?

silvercar

sarah_elton wrote: »

!!!

Didn't know about that - do they usually tell you about this in advance?

It will be in the contract you sign prior to exchange.

You need a mortgage broker who knows which lenders can move quickly.

You need a solicitor who is up to speed.

silvercar

zaphod_beeblebrox wrote:

Abbafan1972 wrote:

I would personally be wary of buying a repossession, not only for the bad karma etc, but I would be worried about potential attacks from the previous owners.

I disagree, most people being kicked out of their 'home' (for want of a word) are happy to turn their backs on a bad experience and run a mile, especially BTL's

They may drive past in the future and take a peak at what’s been done with no grievance thing against the present owner/occupier.

Do expect creditors or their agents to turn up at the front door. Not armed with machetties but politely enquiring of the previous owners whereabouts. I kept a recent utility bill by the door to prove that I was the new owner.

I have seen the previous owners, and their friends, parked outside trying to see what we had done. We didn't actually buy as a repo but off the previous owners directly, when they got into dire straits.

smartpicture

silvercar wrote: »

Do expect creditors or their agents to turn up at the front door. Not armed with machetties but politely enquiring of the previous owners whereabouts. I kept a recent utility bill by the door to prove that I was the new owner.

Yes, I had this a lot after I bought a repossessed property, and sometimes it was hard to convince them that I didn't have anything to do with the original owner! So long as you read carefully every single bit of paper they give you, including the legal pack, so there are no nasty surprises, you should be fine. I had a survey done before the auction.

When I bought mine, part of the money was coming from a Bradford & Bingley account. At the time I had a handwritten passbook, and when I went to take it out they checked the balance and told me I had £500 less than the handwritten balance said because someone in the branch had made a mistake filling in the passbook in the past !!! I spoke to the auctioneers and fortunately they extended the 28 days by another 7 days so I could find another £500. You do need to be absolutely certain you have the funds available in time. Luckily that was in the good old days, so I just went my bank and said, can I have £500, and they gave it to me straightaway without even asking what for - not sure that would work nowadays!

sarah_elton

Thanks guys - not sure I'd ever be brave enough to buy a house at auction, but food for thought with regard to the repos the agents are getting on their books...