What do I need to know about buying a repossession?

sonastin

One of the properties I'm planning on viewing looks like it is almost certainly a repossession. I have learnt from the threads on this board that repossessed properties have to stay on the market until contracts are exchanged and EAs are obliged to pass on higher offers to the mortgage lender until that time so the risk of being gazumped is high, but I'm wondering what else I need to bear in mind if I decide to offer on this property?

Do mortgage lenders have a minimum price that they will accept (like owners would) or are they likely to give consideration to all offers no matter how low (bearing in mind that it has been on the market for a while). In the obligation to get "the best price possible", is it a balance between getting a reasonable proportion of the amount owing compared to getting a quick sale to get the lenders money back ASAP?

Are there any other restrictions or pitfalls to bear in mind? Is the conveyancing process from the buyers point of view the same? Anything else I ought to know before I think about putting an offer in? (assuming I like the look after I've viewed it - its gonna need major work!)

poppysarah

You get it as is. No gas check cos no gas normally.

Offer low.

Cash purchase makes it easier and quicker. get a fast solicitor.

As things get tougher though it might be easier to buy one if there's fewer cash rich out there.

sonastin

Looking at zoopla, nethouseprices, mouseprices, nationwide calculator etc the place seems overpriced as a habitable property, let alone once the work that I suspect will be required is taken into account (there is no garage door which makes me question the security of the place and what state the rest of it is in!)

Are repossessions as vulnerable to the inflated estimates of EAs as much as other properties? Do lenders give consideration to really really low offers - I'm thinking around 75% of the current asking price? I'd expect an owner to slam the door in my face that low but perhaps lenders are more rational when it comes to selling off repo properties?

Or is that just wishful thinking?

Doozergirl

EAs can be susceptible to overvaluing, especially if they don't realsie the amount of work required etc. but as they don't usually have to massage lenders' egos or deal with the owner's own inflated view, they usually market them at around the right price or low to gather interest.

You can offer low but low offers would be more likely to be accepted once the property has been on the market for quite a while... they will need the chance to appreciate that no one is grabbing at the asking price. There will be a minimum price that I think the EA knows about but they will review this if a lower offer is submitted - it takes time for them to come back with an answer on this kind of offer.

saroof

Hi

Can anyone help/advise?

We put in an offer on a repo which was accepted and all going smoothly, even after the public notice. Then we were contacted by EA and told that someone had put in an offer, they were a bit cagey about it all but we suddenly found ourselves in a bidding war. Weve gone up in price 4 times, first 'best price.' then 2 interim prices before being asked for our 'best and final.' Each time we were given time constraints which didnt seem to apply to the other bidders. Our 'best and final' has just been accepted but I'm very dubious and considering dropping out despite being out of pocket quite a bit already... Big question is - If we dropped out now can we still come back with an offer when the other parties offer goes public (if there is another party)???????
Weve been told by our EA we cant, anyone except us can put in an offer if we drop out now.
This seems strange...can anyone advise

Doozergirl

There will be another party.

Estate Agents want sales. They don't enjoy bidding wars after a sale has been agreed - they would not put you or themselves through the hassle for what amounts to no more than £20 per £1000 increase in price for their company. Much less, if anything for them personally.

There is nothing to stop you from pulling out and offering again, but you have to consider how reliable that makes you look. They have to pick someone that they think is going to go the whole hog so this is the kind of game you might lose.

The house is either a price you are prepared to pay or it isn't. If it's still in the right ballpark then grit your teeth and get tot he poiont of exchange asap. If something comes up that causes you to drop your price later down the line then so be it but at the moment, I wouldn't be concerned with playing games.