Would you buy a repossessed property?

desperadoV2

Doozergirl wrote:

New builds are rarely worth what people paid for them so I wouldn't even use that price as a benchmark.

Yes, I'd start as low as you dare. I'd probably go in around £170k too. They will take you seriously as long as you have finance in place. ie. get a mortgage decision in principle asap! You need to provide proof with your offer.

The EA also has to be on best behaviour with a reposession as they have to leave a thorough paper trail as it stands to be audited. That means documenting all offers. Therefore, you stand a better chance than with most of actually getting a cheeky offer through.

Bear in mind that it is always possible for people to gazump you with a repo but it's never happened to me yet, touch wood.

I have an mortgage offer on principle from my bank but I have got better mortgage rates offered from a mortgage broker (she is a regular MSE forum member). I didn't go for mortgage agreed in principle from her because I have found different properties ranging from 170K - 190K and haven't 100% decided which ones and I'm still looking. The EA didn't ask for mortgage on principle to put in an offer. So I will give it a try and see what happens. If I do need to get mortgage agreed on principle to put in an offer then I will do that.

I agree, 2 bed terraced new build house for 217K is alot of money. Looks like the previous owners must have over streched themselves and were unable to keep up with the payments. I think, i will start with 170K and increase my offers by 2K.

Thanks for the info doozergirl.

desperadoV2

bobsa1 wrote:

Agree with Dozergirl. You stand a reasonable chance of a low offer with a repo, but you need to move quickly, usually within 28 days. Give it a try, you can always increase the offer if necessary

Why usually in 28 days bobsa1? The property has already been on the market for 4 weeks. Is there a time limit on repossessed properties?

desperadoV2

welshcakes wrote:

Repo's can be a good investment especially if you are thinking of a BTR in a desirable area. The mortgage company is looking to get back their loan and the longer a property is vacant, the more likelihood of potential vandalism, damp, spiralling maintenance etc. Go for £170k - they can only say no and as stated before, at some point, little increases in your offer will hit the mark at some point.

New build are just like new cars - as soon as you drive them off the forecourt, they've significantly decreased in value.

what does BTR stands for? The EA did say, they already had offers on the property but they were low, so they are waiting for a better offer for their clients.

kelloggs36

BTR = buy to rent

Chunters_a_lot

The house I am in now was repossesed. I must admit I did not fell great about it. But I fell in love with the house.

The couples relationship had broken down becuase one of them had an affair. The one left in property vowed that the other one would not 'make' anything out of the house and stopped paying the mortgage and carrying out essential repairs to the property.

There were loans (which also went unpaid) that were secured on the property and this delayed the sale slightly. Other factors delayed it even more so I don't think that is a reason to put anyone off.

Good luck!

desperadoV2

Milky_Mocha wrote:

One of those caveats is that many repossessed properties are not in the most desirable of areas. Most people facing repossession try to sell the house themselves but when the property has been on the market so long their time runs out. I found a repossessed house (also bought from new by the owners; which area is yours in, I wonder?) and I subsequently found that although it was a beautiful area visually and looked like it housed decent people, properties there struggle to sell.

That's surprises me as well. The property is in tip-top condition, fully fitted kitchen and everything is clean (I wonder whether the EA hired a cleaner and gave it a good clean). It is in a good area and properties nearby have gone for good price. So not sure, why it is still not sold.

desperadoV2

$17mma wrote:

We have just purchased a repo and got a great deal. I say go for it. We originally offerd the then seller a decent price and they declined our offer.

Then house got repossessed and bank invited us to make another offer and got the house for 30k cheaper than we offered the then owner :j so he lost out big time.

Speak to the bank about fixtures and fittings and they may do a deal with you re the stamp duty..at the end of the day they just want their money back and if you are serious will work with you.

What sort of deal re: stamp duty can I get from the bank $17mma? Could you tell me some example please?

ukbondraider

I hear similar advice like this all the time but from my experience it doesnt work like this.

I have tried to buy three repossessed properties but have not succeeded in any. These houses were around the £350K mark and offers below £10K never secured any of them. With repos, you usually also always end up in a bidding war and can in the end lose thousands on all the surveys etc you have paid for.

Dont go into it thinking it is a piece of cake. Most in my experience will go for near list i.e approx £5K off. Given this house is also only £200K, £5K off will be alot relatively, so in my opinion your offer of £180K will be laughed at. However I guess it will depend on how many interested parties there are i.e how desirable the property is. Dont be fooled into thinking the mortgage companies are always desperate to sell with repos.

As for Doozergirls new build price comments, of course you have to use them as a benchmark. Although new build houses are generally more expensive it doesnt mean they are not worth that. You tell me how many new build houses have lost value since being bought in normal circumstances. All rise, and all have risen at a similar % to "older" regardless of what value they are.

If I bought I new build for £217K do you think I would sell below this? I wouldnt even sell below £230K but factor in the 2 yrs of house price rises.

I think £200K is keenly priced and if you like it dont be foolish and lose it trying to get a bargain because it is a repo. The bargain is already there from what I can see.

kelloggs36

I know somebody whose house was about to be repossessed AND who had negative equity on it, and the bank refused the offer they had on it because of the negative equity, but then the bank sold the house at auction at a price much lower than had been offered leaving the previous owner with a larger debt than necessary.

desperadoV2

Fair comments ukbondraider. But I dont think, this property is worth 217K. I think it is overpaid by the previous owners. It is a new build in good condition but the bedrooms are not big. Its okish size and is good enough for FTB like me. Also the EA told me, the property has been on the market for a while now. Eitherway I don't think there is any harm in putting in an offer of 170K. I was worried about being embrassed or not taken seriously but the worse that could happen is, they could say no. So I'm going to go for it and see what happens.

ukbondraider wrote:

I hear similar advice like this all the time but from my experience it doesnt work like this.

I have tried to buy three repossessed properties but have not succeeded in any. These houses were around the £350K mark and offers below £10K never secured any of them. With repos, you usually also always end up in a bidding war and can in the end lose thousands on all the surveys etc you have paid for.

Dont go into it thinking it is a piece of cake. Most in my experience will go for near list i.e approx £5K off. Given this house is also only £200K, £5K off will be alot relatively, so in my opinion your offer of £180K will be laughed at. However I guess it will depend on how many interested parties there are i.e how desirable the property is. Dont be fooled into thinking the mortgage companies are always desperate to sell with repos.

As for Doozergirls new build price comments, of course you have to use them as a benchmark. Although new build houses are generally more expensive it doesnt mean they are not worth that. You tell me how many new build houses have lost value since being bought in normal circumstances. All rise, and all have risen at a similar % to "older" regardless of what value they are.

If I bought I new build for £217K do you think I would sell below this? I wouldnt even sell below £230K but factor in the 2 yrs of house price rises.

I think £200K is keenly priced and if you like it dont be foolish and lose it trying to get a bargain because it is a repo. The bargain is already there from what I can see.