FTB - Buying a repossessed House?

matt1987

Hi all

Looking for a bit of advice..

We had an offer on our 1st choice house declined today - our offer of £10k less of what the vendor wants was not good enough, and she has downright told the EA she will not budge (the asking price is way too high in comparison to v.recent sold prices on the same road).

So, back to the drawing board... we viewed a 2 bed house last week which was vacant. Upon asking the EA what the history was, he said 'Oh I shouldn't tell you this, but it is a repossession'. Cosmetically, the house needs a lot of attention - kitchen needs ripping out and replacing, and the same for the bathroom. Would also need new flooring/carpet throughout and the front tarmaccing/paving. We came away from the house both in agreement that it was nice, but we wouldn't have the funds to do what it needs.

It is up for £99,950, and recently had an offer of £93,000 accepted, but we're told that the sale fell through (we don't know why). If we were to secure an offer between £86-91,000 we've worked out we'd have about £4,000 to spend on it. My dad used to fit bathrooms and kitchens for a living, so he's already said he will do it all for us, and we also know a plasterer who would do the work free of charge.

So, the question being.. would the lenders (in our case YBS) be willing to lend for a repo property, considering that it needs a new bathroom and kitchen? As far as we're aware, everything is in 'working' order, although completely grimed up, and nothing structural needs doing (as far as we know at this point). I think we could potentially make it a lovely home, and if we made a bit of money that'd be a bonus too.

Do you think it's too much to take on? And do you think we'd still get the mortgage we've had agreed in principle?

Thanks

matt1987

Anybody?

jozbo

are you sure the 93k sale has fallen through? as it is a repo it could well be the buyer is still in the picture. in order to get the place, you would have to offer more. even if it did fall through, i think you'd have to go to the top (or above) the offering range you mentioned in order for them to accept. and beware of getting gazumped...
cant judge whether it's worth getting regarding amount of work you need to do. how 'working' is the kitchen and bathroom? could you stand living in a bit of a building site for a couple of years?
why is it not your 1st choice house? was that wildly different?

Ankatden

Its not unknown for properties to fall through as simply people cannot get mortgages, one only has to look at Rightmove for this.

Have a look at Rightmove with Property Bee application on and it will often tell you what has been happening.

No requirement for you to offer more, can always start off less and less what is happening as if you are in a position to buy with agreement in principle and a deposit then EA will put it forward to the Lender.

Fact it is lower is not an issue as ultimately if property has to go to Auction it may only fetch £75k.

One good way of knowning whether a property is a Repo or not is from inside photo's on Rightmove as in many cases with a repo you will see the tape across toilet / bathroom fixtures saying don't use or on boiler if its visible. Its not foolprood but can be a good indication as lenders who repo tend to turn off water and drain the tanks in case of a leaky pipe.

jw2003

We did the same last year mate, needed a new bathroom, kitchen, boiler, central heating, external doors. The survey reflected our offer for the property in the condition it was in

Why are they not supposed to tell you it's a repossession though? We were told

P.s we offered 10% below the asking price and this was refused so we upped it by a further 2% and it was accepted pretty quickly. It had only been on the market about 6 weeks though so I think they could hold out for longer to see if they could achieve the asking price

Owain_Moneysaver

Be aware that if there isn't a working bathroom and kitchen, lenders may not recognise the house as habitable. £4k doesn't sound much to have available - is there still a heating system? will you have to pay to have gas/elec/phone reconnected - often these are disconnected on repos.

Pint_of_Gem

In our quest to buy a new place we have offered on a couple of repo's.
The process is pretty scary, but probably better for a FTB than someone in a chain. Basically, as long as the offer is above what the mortgage company want for it then you'll be accepted. Make sure you have everything in place for your own mortgage first - worth getting offer for more than you will need. Then approach the agent, try and find out what they think is a good offer. On repo's they are often not on a commission, but a set fee, so not as much in their interest to maximise the value, just get a quick sale.
If the house sale fell through before, and it is with the same agent, why not ask if they can approach the previous 'buyer' and offer to buy their survey from them for £50? It may be that there was something picked up in the survey which is why it fell through? If the roof needs replacing along with everything else, for example, then that might put you off?
Once your offer is accepted the house then has to be marketed with your offer, eg, "We have received an offer of £93,000 on this property. Any interested parties should submit an offer higher than this before XXX date". This is the squeeky bum time! The whole world knows how much you have offered. The agent will continue (is under obligation) to show people around.
However - once your offer is accepted, the mortgage company will want to complete within 28 days, which is quite quick in the whole scheme of things.
As mentioned above, you will have to arrange for everything to be re-connected and won't be able to simply move straight in immediately.

Milliewilly

Pint_of_Gem wrote: »

In our quest to buy a new place we have offered on a couple of repo's.
The process is pretty scary, but probably better for a FTB than someone in a chain. Basically, as long as the offer is above what the mortgage company want for it then you'll be accepted. Make sure you have everything in place for your own mortgage first - worth getting offer for more than you will need. Then approach the agent, try and find out what they think is a good offer. On repo's they are often not on a commission, but a set fee, so not as much in their interest to maximise the value, just get a quick sale.
If the house sale fell through before, and it is with the same agent, why not ask if they can approach the previous 'buyer' and offer to buy their survey from them for £50? It may be that there was something picked up in the survey which is why it fell through? If the roof needs replacing along with everything else, for example, then that might put you off?
Once your offer is accepted the house then has to be marketed with your offer, eg, "We have received an offer of £93,000 on this property. Any interested parties should submit an offer higher than this before XXX date". This is the squeeky bum time! The whole world knows how much you have offered. The agent will continue (is under obligation) to show people around.
However - once your offer is accepted, the mortgage company will want to complete within 28 days, which is quite quick in the whole scheme of things.
As mentioned above, you will have to arrange for everything to be re-connected and won't be able to simply move straight in immediately.

The one I am in the process of buying - a repo from Northern Rock has to exchange in 14 days - I have agreed to exchange and complete on the 7th day of it going in the press which is next Friday 27th. I cannot exchange any earlier as the offer price has to be advertised for 7 days.

The searches etc on my side are already done and my Sol has faxed Northern Rock's sol asking for confirmation they will exchange and complete on the 27th so just waiting for an answer.

I have done a deal with my Sol that if the sale falls through then I don't get charged (he gets enough out of me I have used him for years for conveyancing!)

The plan is for a skip to be on the drive Saturday morning then the marigolds and nose peg on over the bank holiday.

matt1987

Thanks for all the replies

I have done abit of reading up regarding repos, and have read all about the offer being advertised in order to attract higher offers. It is abit nerve wracking, as we could potentially lose out on fees.

In terms of what needs doing - the external doors and windows are fine. All UPVC and look fairly new (it seems like the old occupants had tried to spend some money doing it up, and the pot had run dry) the boiler isn't new, looks fairly old, but we're told it's in working order, and the central heating is all fine, just obviously the issue that all gas, elec and water as been disconnected for the time being.

Provided that the water is turned back on, I think the bathroom and kitchen would be fully functionable - there is an oven and sink with units in the kitchen (although they are gross, and we'd rip them out asap - on paper it's a working kitchen) and same for the bathroom - shower cubicle with electric shower, bath, loo and sink.

The EA told us that there had been an offer, and it was Sold STC but fell through and hence is back on the market. He was very young and seemed inexperienced though, so we would have to clarify the situation as when we had rung initially to book the viewing we were told 'There has been an offer made on this property' so all seems abit murky.

We have a 2nd viewing booked for Thursday evening, so we will clarify everything then, including how 'working' the kitchen/bathroom and CH are. I think there's been a lot of interest in it though, we tried to book a viewing for tomorrow evening, but were told there were others already viewing it and were offered the opportunity to look around with them, we decided not to though.

(P.S It wasn't our 1st choice, as ideally we wanted something we could move straight into, but if we have the funds and help from people we know, we've decided we wouldn't mind abit of a challenge)

Ankatden

matt1987 wrote: »

In terms of what needs doing - the external doors and windows are fine. All UPVC and look fairly new (it seems like the old occupants had tried to spend some money doing it up, and the pot had run dry) the boiler isn't new, looks fairly old, but we're told it's in working order, and the central heating is all fine, just obviously the issue that all gas, elec and water as been disconnected for the time being.

Go to Fensa site check for certificates.

What it does tell you if address and post code are right are the dates windows and doors installed.