What would you do?

typeractive

Hi MSE's

On my hunt for a house, I spotted a property today. I know of the property quite well and I have been in it a few times. It is a 3 bed detached house, in need of modernisation (it was already started, but incomplete - probably 25k to complete it) the asking price is within my range, and cheaper than an alternative property I was looking at that needed similar attention. Here's the catch: The property was bought by a friend of mine a year and a half or so ago. He couldn't afford to finish it and it ended up being repossessed!! My other friend (plasterer of the house) said I should try and find out about it and buy it if it was a good deal at the time. It is now on the market. The street is not the most desireable to live in, though the property price relfects this (65k asking price, sold in 07 for 120k) still needing that work done to it as I say.

Factors against - feeling guilty on my mates misfortune (of course I'd speak to him before anything), and the street.

Factors for - size, space, price, ability to rennovate it as I please, close to amenities.

I feel like I need to make a decision asap as I'm sure it won't be on sale for long! I'm not sure if I'm thinking of it as a home or a bargain that I should go for if that makes sense?

Any help gratefully received!
Thanks

pawpurrs

Take the friend out of the equation,just for a minute.
And look at it as just a house, and base your decision on whether it is the right one for you. Thats a hell of a drop from what he paid.
Now you can renovate any house and make it how you like it, but the one thing you cant do is change its location, if the location isnt right, its not for you.
You cant help what happened to your friend, and he needs it to be sold, so dont feel bad about that.

natman

Hi there.

A friend once told me this -

"It is better to buy the cheapest house in the nicest area rather than buy the nicest house in an area that leaves a lot to be desired"

Having read your thoughts, I suppose I would try to imagine living there. you mention shops nearby, you mention the street is not that great, why is this??? are you talking bad neighbours or are you taking the street is a bit shabby?

Personally speaking if the residents of the streets are the problem or there is an issue that is bad then personally I would stay clear as if you are buying it as an investment. you may not be able to sell. If your buying it as a home and you have weighed it all up maybe it is a go-er!!! but still think about you actually living there objectivley

Regarding the friend, to be honest even though you may not like me saying this, but as long as your up front and honest why should there be a problem, its not like you are forcing him out of the house at all. Its on the market to be sold, so whethere it is you or somebody else, this should not be an issue.

A lot of things to weigh up my question would be - you say it will cost 25k to do it up, so thats 65k +25k which is 90k. Is there something better out there for 90k in a better area??
good luck

BitterAndTwisted

Agreed, if the house is in a bad location do not buy just because it feels like a "bargain". There will be other bargains in better street

typeractive

natman wrote: »

Hi there.

A friend once told me this -

"It is better to buy the cheapest house in the nicest area rather than buy the nicest house in an area that leaves a lot to be desired"

I looked into that with a previous house, though missed the sale!

Having read your thoughts, I suppose I would try to imagine living there. you mention shops nearby, you mention the street is not that great, why is this??? are you talking bad neighbours or are you taking the street is a bit shabby?

Well the street has a reputation. I'm not enitely sure if it still has such a reputation. I guess I'm saying it is a bit shabby, couldn't fully comment on the direct neighbours. The house is situated at a nice end of the street, kind of on the 'outskirts' of the street if that makes sense, and there are a few nice big houses near to it. These houses have a nice feeling of privacy. The current house I'd be looking at is very open. It would need a wall / fence or hedges to give a bit more of a private feeling about it (without isolating myself from the neighbours totally).

Regarding the friend, to be honest even though you may not like me saying this, but as long as your up front and honest why should there be a problem, its not like you are forcing him out of the house at all. Its on the market to be sold, so whethere it is you or somebody else, this should not be an issue.

Yeah this follows the advice of most people so far. To be honest I am more so thinking of it as living in the house rather than gettign approval off him. I would be courtius and at least inform him of my plans if I decide to go ahead.

A lot of things to weigh up my question would be - you say it will cost 25k to do it up, so thats 65k +25k which is 90k. Is there something better out there for 90k in a better area??
good luck

Well this is the thing. I want a lower mortgage really. I can rennovate the house over time as I have savings. Indeed I could plough a lot more of my savings into a larger mortgage, but I don't seem to find anything around that kind of money that interests me. A lot of 2 bed terraces (perfectly fine for a single FTB like me) though the other places (such as this) offer more potential. Indeed they need rennovating / completing but I would want to put my own stamp on things anyway. I'm looking at a home with potential to a return in the future.

Currently there is a 4 bed semi across the road (with big gardens front and rear kitted out nicely going for £144k. This has just been added to the market, and personally I can not see it fetching that price. I'm trying to be realistic about the options available to me and the ceiling price of the area.

Thanks for the advice, keep it coming!

lostinrates

How long would you be planning to live in the house?

that is a tremendous price drop!

typeractive

lostinrates wrote: »

How long would you be planning to live in the house?

that is a tremendous price drop!

Well I'm not entirely sure. Moving in and being comfortable in there and the area, then for a few years I'd imagine. If I wanted to move then I would hope to rent it out.

It is a big drop, though the work is extensive:
Ground works outside property
Kitchen fitted
Bathroom fitted
Every room addressed
Central heating fitted
Outside rendering over old bricked up windows
Some privacy added / fencing etc
Hopefully a detached garage built with power and lighting. (that's a 'luxury')

Any other structural work that I might have missed / sows up on survey.

Anyone that buys the house would need to do most of that work, with the asking price it's going to mount up obviously.

pawpurrs

but pressumably it was in the same condtion when your friend bought it, so thats a hell of a drop, why are the bank putting it on for such a low price? They have to be seen to get the best price possible for the person that is repossesed, have prices fallen by 50% in your area?
Does he have that much equity in the property? Surely if he does, why did he not try and sell it himself before it got repossesed?

theartfullodger

Your repo'd friend then owes money to the mortgage company. Whatever the house sells for, less expenses, will be taken off that debt leaving him with an ongoing debt.

So he won't be a happy bunny- for quite a long time: And if he knows who bought it will think (regardless of this being right or reasonable) that the a***ole got a bargain at his expense and if they'd only paid more he'd owe less...

If you are happy with this & possibly never speaking to him again apart from insults from him, go ahead and buy. If not, drop it & buy elsewhere: There is always another good deal...

Cheers!

Lodger

(I've bought 2 repos..)

barnaby-bear

pawpurrs wrote: »

but pressumably it was in the same condtion when your friend bought it, so thats a hell of a drop, why are the bank putting it on for such a low price? They have to be seen to get the best price possible for the person that is repossesed, have prices fallen by 50% in your area?
Does he have that much equity in the property? Surely if he does, why did he not try and sell it himself before it got repossesed?

If the friend started work and didn't finish e.g. took out a grotty bathroom but didn't fit new one - or kitchen - he may have made the house technically uninhabitable - these are difficult to sell as mortgage lenders have to protect interests and will insist on a retention i.e. you have to have the money up front to do the work or won't lend - hence the majority of people will not be able to get a mortgage to buy it

typeractive

pawpurrs wrote: »

but pressumably it was in the same condtion when your friend bought it, so thats a hell of a drop, why are the bank putting it on for such a low price? They have to be seen to get the best price possible for the person that is repossesed, have prices fallen by 50% in your area?
Does he have that much equity in the property? Surely if he does, why did he not try and sell it himself before it got repossesed?

I think it was in worse condition. He has modernised quite a bit of it. New upvc windows, been plastered mostly throughout. Needs kitchen and bathroom fitting. Think it has the central heating system in - or the radiators are there? Can't fully remember. It had new RSJ's put in etc.

He ran out of money (poor project managing to be honest, and busy social life), then he was very unfortunate to lose his job.

theartfullodger wrote: »

Your repo'd friend then owes money to the mortgage company. Whatever the house sells for, less expenses, will be taken off that debt leaving him with an ongoing debt.

So he won't be a happy bunny- for quite a long time: And if he knows who bought it will think (regardless of this being right or reasonable) that the a***ole got a bargain at his expense and if they'd only paid more he'd owe less...

Right. Well I'm not sure about all that. I would be able to find out though. I could pop to his house and see him and his mrs. As you say if the person paid more then he'd pay less - I understand though nobody is going to pay over the asking price.

If you are happy with this & possibly never speaking to him again apart from insults from him, go ahead and buy. If not, drop it & buy elsewhere: There is always another good deal...

Cheers!

Lodger

(I've bought 2 repos..)

Well no...I'm not happy with that. I'd have to speak to him and tell him what I think. Thanks for the feedback though it is very much appreciated and honest in terms of people's feelings. I know I wouldn't be chuffed with the same scenario, though I'd (hopefully) reflect upon some of the reasons why it didn't work out in the first place.

barnaby-bear wrote: »

If the friend started work and didn't finish e.g. took out a grotty bathroom but didn't fit new one - or kitchen - he may have made the house technically uninhabitable - these are difficult to sell as mortgage lenders have to protect interests and will insist on a retention i.e. you have to have the money up front to do the work or won't lend - hence the majority of people will not be able to get a mortgage to buy it

A very good point. I know of other properties I have looked at, where people are struggling to get mortgages as the conditions of the house are defined uninhabitable. Something I would have to find out, prior to any surveys. As it happens both the kitchen and bathroom are empty shells with the provision put in place (think the downstairs toilet works though).

It's been going through my head all day now, and to be honest I'm bloomin fed up with houses. As much as a I want one it's just so difficult being a single FTB, even with good savings.

My mate was just speaking to me and he thinks I should buy it to rennovate and sell as it would be too much to run myself heating wise etc. He says the house is a cold house anyway from when he was plastering and that it would be too big for me. Though I am looking for a home as well as an investment that might pay off in the future. He also thinks that with it being detached I have to pay more council tax / some rates for not having neighbours (though wasn't quite sure) - is this correct? Does anyone know?

Thanks for all the responses people.