Offer on repo house

Regina.filangie

We recently viewed a 2 bed house that the agent told us on enquiring was a repossession. As such we had to get a mortgage AIP to ensure we were serious buyers before they'd let us even see it! Advertised for £84,950. However no garage or downstairs loo, needs a lot doing to it i.e. new kitchen, bathroom, internal doors and skirting boards, dodgy conservatory needs to be demolished, garden is a mess and needs landscaping etc etc! I also did some digging and discovered that there is a 3 bed house for sale literally round the corner in the same street with downstairs loo, garage and in good order throughout. This has been on the market for 10 months, originally for £109,950 but reduced to £99,950 in March this year but still not sold. The agent it is up with said there is room for negotiation on price as long as offers begin with a 9. With this in mind, we feel the 2 bed is hugely overpriced but we like it and are keen to do it up how we want it providing we can get it for a decent price. We viewed on Sat, and we got the obligitory 'courtesy' call from the agent on Tuesday asking if we wanted to make an offer. I explained all the points above and made a cheeky offer of £65k. They rang back 15 mins later and said it had been rejected and asked if we wanted to increase it. I said no, left it overnight and rang Wed pm to increase it to £68,500. They said they'd get back to me but they didn't?! What does this mean? A possibility that they're considering it? I also found out that the house was last purchased in 2001 for 40k, which made me sad as any profit made on this will go to the bank, not the person who has lived there for ten years and lost his home :mad:
We are FTB and terrified of the whole process - not least the possibility of being gazumped with a repo :eek: I'm also dreading the games I know some EAs play with mysterious last minute offers that seem to come from nowhere and disappear as soon as you call their bluff! Oh the joys of house hunting.....

TagEHeuer

Good luck, I'm no expert in this field (nor many others!) but if they don't get back to you for a few days, what's the harm in giving them a call? Also remember be as cheeky as you like! It's the bank you're bargaining with, not some poor chap who needs the money!

Happiness with your future.

sonastin

Could be that they are considering your offer. Could be that the person dealing with that property is part time and your offer is sitting on their desk until they come in on Monday. Could be that all offers / any offer within a certain % of asking / acceptable price need to be discussed by a committee that only meets every second tuesay. With repo's its too hard to second guess what is in the mind of the vendor. Just be patient as there is very little you can do to speed things up.

A couple of other things to bear in mind...
1) They may have bought for £40k but they may have remortgaged for £ks more than that in the intervening years. Repossessions for houses owned that long are rarely down to the original debt.
2) If there is anything left over from the sale price once the mortgage and all of the repossession fees and charges have been paid, that money belongs to the person who lost their home. The bank doesn't get to profit from selling a property they repossess.
3) Not all folks who have their home repossessed are poor luckless victims of big bad banks. The guy who owned our "repo" before us sold his services as a builder. Looking at the state of his own house, I wouldn't trust him to screw in a light bulb. He has ripped off many people, including his own solicitor (if the neighbours are to be believed). He is still trading and using our address to do so (luckily so far all we've received for his "new" business are receipts for goods that he's paid for!) so somewhere down the line I think he's going to end up owing someone else £ks. He definitely deserved to have his house taken off him and I don't feel bad at getting it for a knock down price. I admit that some people do, through no fault of their own, find that themselves facing repossession but don't let that stop you buying what is right for your family!

Regina.filangie

Thanks for your replies - very helpful! I hadn't realised profit went to the previous owner rather than the bank, and I see what you mean about the possibility it could've been remortgaged over the years. I guess there's no point speculating!
Well, the agent phoned yesterday to say £68,500 had been rejected so we phoned back today and made a final offer of £73,000 which was also rejected
This isn't necessarily our final offer, but we didn't want them to know that! The plan now is to wait a week or 2 to see what happens. As far as we're aware they haven't even had any other enquiries let alone any viewings. I'm too impatient though and I just want to agree a price now instead of all this too-ing and fro-ing!

split_second

right, as a ftb that bought a repo 2 and a half years ago i will put my 2ps worth in:

repos call for hard ball to be played- even if you are bricking yourself at the other end of the phone, let the estate agent think you are counting every penny of what it needs and if you dont believe its worth it you will go to another house.

i agree with the post number 3, our former owner has a list of hilarious horror stories, selling to me the bank lost somewhere in the region of £40k

Regina.filangie

I will have to work on my hard ball playing skills - I'm far too nervous and inpatient but I'm trying. Offered 20k less than asking price on first offer, and have only made 2 further offers since which are still 12k less than asking price. My fiancee (we also got engaged in May this year and are planning to get married in 2014!!) wants to put a higher offer in but i've persuaded him to hold off for a couple of weeks first, bearing in mind there has been no other interest. We are, of course, looking at other houses, but this one is ideal - i'm returning to work soon after being off on maternity leave and the house is literally around the corner from the future in-law's house, who are going to look after the baby for us.

jimcrock

I was a first time buyer this summer and i purchased a repo. The house was an end of terrace 2 bedroom cottage with a small garden. It was on the market for around £85k i think. I offered £75k and the EA phoned back within an hour telling me it had been refused. They said the bank was looking at nearer £80k so I offered £75.5k. I was then phoned by the EA about 24 hours later to say they had accepted. It seems like they were considering this offer over that time period.
I also found out that a higher offer had also been put in by another buyer but because I was a cash buyer compared to having a mortgage to arrange the bank chose me!!!

Jeffrey_Shaw

Any offer is only subject to contract.
Any prospective purchaser- once accepted by vendor- ought to pay for a Homebuyers Report. If it reveals unknown defects or downvalues the house [or both], the 'stc' offer could be reduced to take account of that.

DVardysShadow

Regina.filangie wrote: »

I also found out that the house was last purchased in 2001 for 40k, which made me sad as any profit made on this will go to the bank, not the person who has lived there for ten years and lost his home :mad:

Not necessarily the case. They will set the cost of redeeming the mortgage against the purchase and no doubt a heap of fees. But once that is settled, any surplus goes to the former owner. AUII.

Jeffrey_Shaw

DVardysShadow wrote: »

Not necessarily the case. They will set the cost of redeeming the mortgage against the purchase and no doubt a heap of fees. But once that is settled, any surplus goes to the former owner**.

** Not so, if there are second/third/etc. mortgagees- they are paid out, in descending order, from any surplus sale proceeds.