Repossessed Property Buying: Quick Briefing Discussion

mrcol1000

plant007 wrote: »

Hi

I wonder if somebody could help me clarify a point regarding the the value of repo/auction properties against market values. The 'Buying Repossession' article states;


How much cheaper are they? - Prices are anything between 10% to 30% off market value


Does this mean that after you have renovated the property up to market standard, they are then 10-30% cheaper than market value or does it mean that a house bought at auction is 10-30% cheaper than market value, and then you have to factor in any renovations, making the difference less?



Think its the latter but thought I would check
Thanks
Andy

It means you can get them for 10-30% cheaper than what you would pay if the house was just a traditional sale with a resident owner selling it through an estate agent. They don't neccessary have a lot of renovations needed. Our house was £70k rather than market value of £95k and just needed new carpets, new boiler and new fuse box. Cost us maybe £4k. We were first time buyers. Would recommend repo's to anyone just be prepared to walk away if a price war starts.

harryhound

"Repos" don't always go to auction BUT if you find a house with the electric cut off and the plumbing drained down and labelled - then it could well be a "repo". On the down side you might have to dress up as a surveyor to be allowed to do a decent survey up close and dirty with the property.

Chat up the neighbours.

In my case I probably got a discount of 10% (it was a time of rising demand and prices) and no hassle from being a member of a chain - it is just like buying a "probate" property.
Bankruptcy is "living death".

razam

Hi

FTB here & considering buying repo - with the cost of london house prices it's pretty much the best option ive got
I just wanted to ask if anyone here has used Capital Property Lists (as mentioned in the MSE article), is it value for money in regards to how regularly new repo property info gets updated? etc.. Also the 'free' book they give for 12 month package - is it up to date? I could only find a 2006 edition on Amazon (& no other editions elswhere). If that's book you get, then i won't bother as the property market has moved on in the last 5 years.

Anyone have experience with them?
Thanks

honeybunny1982

Hi everyone,we are renting very nice flat and are very happy here,however we received letter from solicitors saying that we have to move out by the end of the year. So we phone our landlord only to find out they went into administration and the property has been repossessed by bank,we saw an opportunity and put an offer.the flat has got a short lease of 46 years remaining therefore is for cash buyers only. We are lucky that my dad offered to lend us the money. we did a research, our road is mainly flats with average sold for £180 000, so we came up with an offer of £145 000. We send them an offer with proof of our funds,which they asked for and it has been 2 weeks since. talked to them this morning and they still dont know how much do the want for the flat. r they just playing us along,hopping they may sell it for more after we move out? or maybe our offer is too low? they said previously that they would probably accept £160 000 but need to do proper valuation first, sent estate agent the next day,but as i said its been 2 weeks since then. we thought we put a lower offer and see what they say,but things are moving very slowly.we have to little kids and only one month left to move out. but i really like the flat and wish we could just stay here. what do you think are our chances? the flat was sold for 142 000 in 2003,needs new windows and doors and of course the lease is very short

GDB2222

honeybunny1982 wrote: »

Hi everyone,we are renting very nice flat and are very happy here,however we received letter from solicitors saying that we have to move out by the end of the year. So we phone our landlord only to find out they went into administration and the property has been repossessed by bank,we saw an opportunity and put an offer.the flat has got a short lease of 46 years remaining therefore is for cash buyers only. We are lucky that my dad offered to lend us the money. we did a research, our road is mainly flats with average sold for £180 000, so we came up with an offer of £145 000. We send them an offer with proof of our funds,which they asked for and it has been 2 weeks since. talked to them this morning and they still dont know how much do the want for the flat. r they just playing us along,hopping they may sell it for more after we move out? or maybe our offer is too low? they said previously that they would probably accept £160 000 but need to do proper valuation first, sent estate agent the next day,but as i said its been 2 weeks since then. we thought we put a lower offer and see what they say,but things are moving very slowly.we have to little kids and only one month left to move out. but i really like the flat and wish we could just stay here. what do you think are our chances? the flat was sold for 142 000 in 2003,needs new windows and doors and of course the lease is very short

Short lease of 46 years makes the flat almost unsaleable, so that's quite a high bid you've made. Have you checked the cost of extending the lease?

honeybunny1982

Hi,
thanks for reply. we have contacted the freeholder and was told to extend the lease would be around £36 000,however we wont proceed with the purchase until our solicitor confirms it and also unless we have a written confirmation that the freeholder will actually extend the lease. do you think that buying a flat with such a short lease is a risk?

steve1500

We are thinking of putting in an offer to buy a repo that is being marketed by an EA. We will need a mortgage and know the bank (courtesy of Land Reg) that repossessed.

If the offer is accepted are we best off approaching the lender that re-possessed for the mortgage or won't they care?

silvercar

honeybunny1982 wrote: »

Hi,
thanks for reply. we have contacted the freeholder and was told to extend the lease would be around £36 000,however we wont proceed with the purchase until our solicitor confirms it and also unless we have a written confirmation that the freeholder will actually extend the lease. do you think that buying a flat with such a short lease is a risk?

It is a risk, only you can judge whether it is a risk worth taking.

AFAIK the freeholder could delay you extending the lease until you have owned the property for 2 years. At which point the price may have changed. You may find it difficult to agree the extension price and may have to pay legal costs and valuations. All this risk and hassle should be reflected in the price you pay.

silvercar

steve1500 wrote: »

We are thinking of putting in an offer to buy a repo that is being marketed by an EA. We will need a mortgage and know the bank (courtesy of Land Reg) that repossessed.

If the offer is accepted are we best off approaching the lender that re-possessed for the mortgage or won't they care?

Approach the lender that offers you the best deal, the current lender won't give you a better rate just because the property is already on their books and they will still require a new mortgage decision and valuation, so you gain nothing by sticking with them.

FirstTime2012

Hi,

I'm a first time buyer - been looking for a 2 bedroom apartment for some time, and have accidentally stumbled across a really nice flat that happens to be a repossession. Its in good condition, probably ready to move straight in, and asking pricec is well under market value. I called today to make an offer, but the estate agency told me that I wont be able to make one until I have been in and seen their mortgage advisor who will decide if I'm in a position to make an offer. Is that normal?

I'm also a bit worried about the flat staying on the market after my offer is accepted - does gazumping happen often? Will I have to be prepared to end up paying more than my original offer?