Buying a Repo in this Economy

poppysarah

But remember your position is important with a repo. If you can't move quick then they might decide to go with someone who can

EmmaAndSarah

That's my hope, that the fact that we're "chain free" may give us a little bit of an edge. Athough I'm aware that some repo companies will take the lower offer if it's a higher amount of cash to offer (cash-purchasers as opposed to mortgagers, which we are).

sharpe106

Higher amount of cash to offer will not really matter to them if you have the mortage in place and proof of a mortage offer. As for being chain free that is good for when you buy any house and puts you in a good postion as you can move quicker than others

poppysarah

mortgage requires survey and valuation.
That can slow things down and threaten price.

sharpe106

It will only slow it down if the survey decided that the Bank should not loan you the money for that house

Hectors_House

EmmaAndSarah wrote: »

My partner and I are FTB looking to purchase a repossessed house. The one we have viewed needs a bit of work, but we think it's a bit of a deal. Neighbouring houses are going between 175-180K, where this one's market price is 123K. According to the EA, the circumstances with the repo is that the owner had a buyer lined up, but did not complete the sale in time before the respossession came into effect. The house was repossesed in early September, and has not sold yet (obviously).

It seems the standard is putting in offers for repossessions at asking price. My partner and I both work in the insolvency and bankruptcy industry, so we have another type of view when it comes to lenders - we see them willing to accept pence on the pound for their loans, including repossessions and shortfalls. Our view is to go in at least 10-15% below asking price, especially due to the fact that its been unsold for more than 6 months. Is this just naive? Do you think we've got the right mindset when it comes to making offers on repossessions? Thanks in advance!

-Sarah

I guess a lot depends still on the area of the country the house is in and what the local area is like as we're not quite at the same stage of this whole mess as the US with whole roads of houses being repoed.

We completed on a repo in Nottingham over Christmas. Before it was repoed they were trying to sell it for £120k. The bank put it on the market for £95k, then dropped it to £85k and accepted our offer of £72k.

It's not in a bad area. Public transport within minutes walk of the house is excellent and the house itself is part of a Victorian mews so nice and quiet.

Downsides were it needs lots of cosmetic work and the kitchen had been ripped out.

I guess what I'm trying to say is you can no longer rely on comparisons of what nearby houses have sold for cus the market is dropping so fast now. Any EA with any sense will be making getting repos sold their job in this climate.

Go in with an offer that you are comfortable that you can finance in a recession (i.e. if one of you loses their job).

Good luck!!