Tips for buying repossessed house.

tramsden

I've seen a house which is vacant procession and I guess that its a repossessed house judging by whats been left behind & 'Do not use' tape over all the appliances and bathroom stuff. The EA just says its a corporate sale.

Is there any thing I should be cautious of in making an offer for the property.

Tony

halflost

Are you a FTB?

I am and didnt look at any that were reposessions purely for the reason that if you put in an offer and its accepted you exchange in 28 days from what I can gather. But prior to exchange it will remain on the market and if someone offers higher, it will tend to get accepted.

The downside with this is that you run the risk of losing the money you pay out (survey, solicitors fees) if someone beats you prior to exchange.

For that reason, I wouldnt really want to look at reposessions just because you could easily sink £1000+ and lose out.

tramsden

Thanks..

I don't qualify as a FTB, although I've been renting past 3 1/2 years.

It would be risky for me because I was going to offer £130K, asking price was £136K. of course I don't have the problem of selling a house but would have to give my landlord 1 months notice, and hope that he doesn't find anyone to replace me if it falls though. Risky as you said.

halflost

tramsden wrote: »

Thanks..

I don't qualify as a FTB, although I've been renting past 3 1/2 years.

It would be risky for me because I was going to offer £130K, asking price was £136K. of course I don't have the problem of selling a house but would have to give my landlord 1 months notice, and hope that he doesn't find anyone to replace me if it falls though. Risky as you said.

I think thats a huge risk, to be honest, I will be in the same situation as you when / if I ever find somewhere to go to! I would only give notice once I had completed just to avoid the situation of having to find somewhere else if it fell through. I dont know how realistic it is for you to basically pay for two places for the first month?

Although 130 versus 136 seems very reasonable. How long has the property been on for?

tramsden

Property was put on market mid july.
I'd rather not pay out twice on first month but it might be necessary for peace of mind.

GMS

Do not worry too much about the repossession part. Treat it like a 'normal' purchase. With any purchase you are in danger of losing fees for surveys etc.

Is the 136k asking price in line with the market or below?

Visit a 'Whole of Market' broker and see what mortgages are available to you. 28 days for completion is certainly do-able if necessary.

Do you have a deposit?

mostlycheerful

Regarding what price to offer to pay have a look at the cheeky offers thread. As I expect you’ve heard, the market is very flat for most property in most parts of the country at the moment and supposedly still dropping lower so any offer you make may be the only offer being made and so if the vendors are desperate they make take any offer. A recent report said that since Jun 09 there’s been 760,000 sales and 1.1 million people who can’t sell at all. So if the one you’re looking at has been on the market for ages with no interest at all then perhaps offer just £40k for your opening gambit and they may just accept it if they’re desperate and it’s that or nothing. Of course they may just say no in which case perhaps then offer £60k. However if they make you a counter offer of £120k or so then you know you’ve got them hooked and they’re interested so with a bit of bluff and counter bluff and batting the tennis ball to and fro and nerves of steel you may be able to get them down to £70k or £80k or so, a considerable saving over the £130k you’re currently considering offering. Yakface got a £39k place for £14.5k in 97 and recently a commercial place offered at £110k for just £30k! Wow, amazing! I knew someone who went around making very low offers which were refused until then someone accepted one and he got a bargain, so it can be done. Yes, it’s a buyers’ market at the moment so get your haggling negotiating hat on and be assertive and you may be able to get it for any price you want and just a fraction of what they’re asking. If not then it’ll have been worth a try and good practice so if not this one then give it a go with some others. Perhaps let us know how you get on as that would be interesting and could be of help to other people as well. Good luck.

LauraLeah91104

not to mention repossessions are always on the market for 20% less than what they are actually worth. so if the asking price is £136,000, as soon as uve signed the dotted line and moved in, u have already made £27,200

Bibbitybob

As GMS quite rightly said, until you have exchanged contracts you are in danger of losing any property purchase before completion, not just repossessions.

In our area at least, once an offer is accepted on a repo the EA puts a notice up in the shop, online and in the local paper saying what the offer is and inviting anyone else to make any other offers in writing within 7 days. Depending which agent we've dealt with, some say the 28 days for completion is from the day the offer is accepted, others have said it's after 7 day notice period is up. Best to check that one, and then make sure you've got a good solicitor who is on side and aware that you have such a tight timescale to work to.

Then my last bit of advise is to do a drive by before completion (although again, this could be said for any purchase!). We did this and discovered that the roof had been stolen off ours, the EA's knew and didn't think to tell us?! Needless to say we negotiated the price of a new roof off the purchase. Empty properties attract vandalism, and once contracts are signed & exchanged it's all yours to deal with.

And good luck! Our last property purchase took 9 months to complete, so a repossession is looking much more appealing for the next one

mrcol1000

We brought a repossessed house and were FTB. We managed to get a very nice house for 25% less than what it was actually worth. We looked at a few repossessed house and some of these are even cheaper now than when we looked at them so it is a bargain to be made.
The only problem is that you are going in fairly blind.
We were well aware that we could lose the property and agreeded a price we would pay. We went in well below the asking price and allowed the EA to talk us up to just below our limit. We already had our mortage agreeded and the EA demanded to see the agreement in prinicple and the detials of our solictor before accepting our bid. We didn't have a solicitor so quickly got quotes and got the best one we could for the best price that would work on a no win no fee. Our solicitor managed to screw it up and the EA rang us on the 34th day after draft contracts were drawn up saying that as we had exceeded the 28th day limit the bank was pulling out of the sale until we were in a postion to buy. They told us that it was just a game and to try and get to completion as soon as possible. We put a rocket up our solicitor and three days later got a completion date.
I don't see any problems with being repossesed house and there is a good bargain but you just need firstly to be extra careful and check it out more. Some of the properties we went to see had been trashed before evicition. Our one they had gone quietly and not done any damage. The water we turned on ourselves and checked the whole house for leaks. There were none. The electricity we turned ourselves with no problems. We were having a new boiler fitted so we left the gas off and let them turn it on and check everything and there were no problems. All the utilities were happy to check themselves we really had brought the place and open new accounts. It was much easier than taking on a rented property where debts are owed. The one mistake we did make was not realising that the letterbox had been screwed shut and wondering why we didn't get any mail for the first week we lived there (!)
We were very worried and read loads of horror stories and people on here posting not to do it but to be honest it was very straightforward and we got our dream home for a lot less that what its worth.
So you just need to make sure everything is in place inculding your solicitor before you put your offer in. Make sure your solicitor is aware its a reprossession and can move fast. Once the solicitor gets the draft contracts its 28 days so sign everything as quick as possible. Get your survey done and don't put anything concerete till you have exchanged. Don't let the bank play games with you. Decide how much your willing to pay and stick to it no matter what.

bumpybecky

Our first house was a reposession. We moved in on the friday of August bank holiday weekend 15 years ago now. It was only when it went dark that night that we realised there was only one lightbulb in the house and by then all the shops were shut.