Repo Buying.

martynh99

Been to look at a property today thats a repossession.

As a repo it went on market 4 months ago at £199k and is now down to £169k , in that 4 months we are the first people to look at it - 4 others had booked but never turn up for the viewing.

It needs quite a bit of work doing internally and although it's a 4 bed, the smallest room would only just fit a single bed in.

I reckon we'd need to spend £20k to get it up to scratch again as we'd look to knock 2 beds into 1 to make 3 good size bedrooms.

Anyone know what the situation is with banks and repos - do they take less than is owed on a mortgage - we don't know how much is owed on it but want to make an offer considerably lower than asking price and wondered if banks do consider taking less than owed or will they just wait and then put it to auction.

seabright

The amount the property is being marketed for and the amount of the mortgage have nothing in common. The lender in possession is legally obligated to get the best possible price for the property. If they sell for more than the mortgage then the mortgagor gets the excess back, if less then the mortgagor still owes the balance.

Either way, you don't need to worry about the mortgage, you will get the property, free of the mortgage in any event.

One thing to consider however, is that if the lender get a better offer than yours, they'll drop you and take it.

jhe

hi.martynh99.in our case the bank did take less than the mortgage owed. you can put in an offer and they will considerate it, but bear in mind the property will stay on the market right up untill exchange allowing anyone at anytime to jump in with a higher offer, if your offer is accepted it will probably be advertised in the local paper stating what your offer is. the estate agent will want proof of your funds and a.i.p. you will also probably be told completion is expected in 28 days although with us it took a little longer.the bank in repossesion of the property calls all the shots.buying a repo is a rollercoaster ride. in our case the estate agent was constantly asking us to increase our offer as they said others were interested. good luck.

martynh99

anybody know who comes up with the price that repo's are advertised at - do the banks have them valued or is it the EA that comes up with a market value ?

Alexh_3

The best price isn't the market price or valuation, its the best price they can get at that time.

So if you offer 150k and they accept if someone come in with 151k the bank must act to get the best price 151k and you get gazumped.

Banks aren't pushovers though and they may choose to hold onto the house for a little while to get better offers.

MissMotivation

martynh99 wrote: »

anybody know who comes up with the price that repo's are advertised at - do the banks have them valued or is it the EA that comes up with a market value ?

Three valuations normally, one from RICS Chartered Surveyor and 2 EA 'valuations'

G_M

Alexh wrote: »

The best price isn't the market price or valuation, its the best price they can get at that time.

So if you offer 150k and they accept if someone come in with 151k the bank must act to get the best price 151k and you get gazumped.

Banks aren't pushovers though and they may choose to hold onto the house for a little while to get better offers.

Not entirely. The banks weigh up the price and speed. So if you've offered £150, have had a survey, have your money ready, and want to Exchange tomorrow, a new offer of £151 will probobly be ignored as the new buyer would take weeks to get to where you are. However if the new offer was £160, then you'd be gazumped.

And between those amounts it depends on the bank, how long its been on the market etc etc