The trouble with repo's?

fivemice

We've spotted a house that has been repossessed. We're going to view it on Friday.

Do they have to market it up right up to completion? Does that mean someone could gazump us even if we had exchanged contracts?

What other things should we be aware of?

It's been on the market for 3 weeks according to the EA, but I'm sure it's been on longer. It's a five bedroom property on at £232K in a pretty desirable area, originally on at £250K. It says "With improvements to include uPVC double glazing, gas central heating and a good uPVC Conservatory" but it already has a conservatory

What would you offer? Are you likely to get the bank to accept a low offer on a repo? We are FTB so no chain.

Willapp_2

fivemice wrote:

Do they have to market it up right up to completion? Does that mean someone could gazump us even if we had exchanged contracts?

Can't really help about the rest of your post, but there is no way you can be gazumped after exchanging contracts, because that is the point you become legally tied to the house - if the seller (the company who reposessed I guess) pulled out after exchange you can normally sue them for 10% as this is typically the deposit amount. No one wants to lose that kind of money so it just won't happen.

You *could* however be gazumped before exchange, but that is the same with any house purchase really.

fivemice

Thanks. I thought I must have had it wrong
Just checked again and it seems it already has double glazing, GCH & conservatory and just needs cosmetic work doing.

Quite excited about this now. Roll on Friday when we can view it!

saver_sam

Some lenders do insist their estate agents continue to market the property just incase the chain breaks so they dont have to start again. The ones that I am aware that do this practise are normally the sub prime lenders.

fivemice

Also - how does this stand with LTV% things? I mean, if we bought it for an amount that was less than it was truly worth, would we be able to get a better interest rate with it being a lower LTV%?

spunkeyrich

sounds fishy to me. why reduce a price with only 3 weeks of marketing. Anyway that aside, yes it will have to be marketed up until exchange, its the usual way for a repo.
Also, should you get an offer accepted it is normal practice for an advert to go into your local paper asking for higher offers than the one accepted. This is to 'cover' the bank so that it can 'prove' that they achieved the best possible price to any interested party.
repos are not the easiest or cheapest way of getting a home, some agents are instructed to market a property 10 % more than what they are valued at, then reduce down to make them look like a bargain. This may be the case in this property.
just check around and make sure it compares well with other homes in the locality. I dont mean to put a downer on your exitment but just be aware.
Try offering around 215 and see what they say.

rich

ps it is highly unlikely that a valuer will say its worth more than your paying, even if it is. The mortgage companys are only interested in the price your buying it for, so therefore a valuer who is instructed by the morgage company wont wish to make waves.

fivemice

its hard to compare as its a small village, but there is a three bed in the same village on for 219k. same house design but smaller extension.

i think the owners may have marketed at 250k, and now the lenders are asking for 232k.

imoneyop

You can get some idea of what the lenders liability on the property is by looking on nethouseprices.com. If the original owners bought it in the last 5 years then it will be on there.

brock-cruse

fivemice wrote: »

We've spotted a house that has been repossessed. We're going to view it on Friday.

Do they have to market it up right up to completion? Does that mean someone could gazump us even if we had exchanged contracts?

What other things should we be aware of?

It's been on the market for 3 weeks according to the EA, but I'm sure it's been on longer. It's a five bedroom property on at £232K in a pretty desirable area, originally on at £250K. It says "With improvements to include uPVC double glazing, gas central heating and a good uPVC Conservatory" but it already has a conservatory

What would you offer? Are you likely to get the bank to accept a low offer on a repo? We are FTB so no chain.

Hi fivemice...just wondered what you ended up thinking about this property as i believe its the same one we have viewed! Looking at some of your posts you live in Nottingham as we do and have been looking in the same areas as we have eg Bingham and villages. Although i gather you have now bought a place. Where did you end up then? My guess Bingham??? We had been in a chain for 7 months buying a lovely house in the same village as the repo but unfortunately it fell through at the last minute (vendor decided to sell to daughter). We then went to see this repo house and tried to bid for it but believe me they were having no low offers! Then our buyer pulled out so we are back on the market...what a coincidence that you have also seen this place. Just wondered what you thought???!!! You saw it before us and it sounded like you were looking forward to viewing. So what put you off it? Would love to compare notes! Not sure if we can afford it now with interest rate rises plus the fact they were having no offers. Just got to keep looking while trying to sell ours.