house on market for 3 years!

arwalder

My mother in laws house has been on the market for 3 years had no offers andonly a handful of viewings.

The pressure is now on as the mortgage has to be repaid in august 2013 as she is now 65 with a limited income of £9,600 per year and outstanding mortgage balance of £99,000.

There is approx £20,000 equity in the house which has effectively been wipedout due to purchasing at the peak. With Erc's of £5000 to be paid unitill July 2013

Options are limited and would more than likely involve some members of thefamily having to act as guarantors on any new mortgage, possibly on a buy tolet. With her also sinking a further £18,000 inheritance into the property.

I would like some ideas of what action she should take?

Do we do all we can to sell the house reduce asking price, make house morepresentable for sale and take the hit. Luckily she has a new partner with whom she can move in with. Or family take the risk of guaranteeing a new buy to let interest only mortgage?

This is a deperate suggestion but with such a specific selling window idealy after erc's but before august is it worth considering a "we buy any house" type offer? or auction? have any members had any experience of using them.

Thanks in advance.

TastyTeeth

Avoid the "we buy any house" type at all costs. They will be between 30-50% under sale value with any offer.

Fire_Fox

She purchased at the peak (?2007), wanted to sell up immediately afterwards (2009), took out a mortgage of £100K with only six year term? That doesn't make any sense, is there a typo in your post? Does she have an endowment or something?

If it's been up for three years with few viewings the house is likely to be massively overpriced for what is on offer. Have you researched land registry sold prices for the street and area? Has she decluttered, spring cleaned, lightened and neutralised the decor, sorted the garden, finished all those niggly DIY tasks? Much of this costs very little. If you post the Rightmove link people will give constructive criticism.

Buy to let mortgage on what? Your mother in law's house with her still in it? Few lenders will permit you to let to family. Or buy to let for her to move out and take in tenants? You need equity for a BTL mortgage. Does anyone know about the reams of legislation surrounding landlording and do you need that level of stress?

There are loads of threads on buy your house cheap companies, expect to get a stupidly low offer and then be gazundered even lower right before exchange. Highly unlikely you would be able to pay off the mortgage.

arwalder

Thanks for taking the time to reply,

Sadly the post is correct it was interest only mortgage taken out in 2006with a term of 7 years with a rate fixed for 5 years. But with erc's payable untilJuly 2013 which makes no sense at all. I have had this argument with thePrincipality and thought I had resolved the issue but I now am unsure. I amcalling the again in the morning and will confirm the date the erc's areapplicable.

Unfortunately my husband and I were not aware of the deal she signed and in2006 as she was badly advised and locked in to a pretty awful mortgage. There is no vehicle in place to repay the mortgage.

Luckily she is in a position to move out of the house as she has a partnerwhom owns his own home.

So maybe moving all of her furniture out giving the place a really goodclean and paint and re-marketing the property at a lower price is the answer. Thevaluations on the sites vary quite dramatically but I think the best option isto price it attractively aiming for a quick sale.
Thanks again the advice is much appreciated.

Fire_Fox

What valuations? Just look at the land registry sold prices for the last year or eighteen months for the local area. Don't look at predicted values, these are often inaccurate.

I am really surprised the lender permitted the mortgage to be taken out without an endowment or other method of repayment.

arwalder

thanks again, Just had a look on the site suggested and unfortunatly there are no houses i can make a like for like comparison on. Very few houses have been sold those that have are only 1 bedroom or flats where as this property is a 2 bed house freehold.

The sites i have used previously for valuing the property are the ones Martin has reccomended and range from £45,000 to £111,000. As long as the mortgage of £99,000 could be mostly covered without having to add too much extra in to cover fees and charges. Would a price of £99,999 be attractive enough to gain some offers. I completely understand this will not cover the debt but it's a loss she may have to suffer to be free from this stress.

googler

I get the impression from talk of 'giving it a good clean' and 'decluttering' that this hasn't been done already....

If not, why not? You've had 3 years to do it....

arwalder

It has been done, but maybe not with the intensity it needed.
Think if my mother in law was to move out and store/sell the furniture this would help.

The house is clean and all key areas in good condition but does need to be de personalised and de cluttered.

Often there is nothing like pressure to make you act faster and think a little harder. Think it is time for the family to take a more active role in the sale of her house. I must admit it is very easy to feel guilty about not acting on her behalf sooner.

Fire_Fox

arwalder wrote: »

thanks again, Just had a look on the site suggested and unfortunatly there are no houses i can make a like for like comparison on. Very few houses have been sold those that have are only 1 bedroom or flats where as this property is a 2 bed house freehold.

The sites i have used previously for valuing the property are the ones Martin has reccomended and range from £45,000 to £111,000. As long as the mortgage of £99,000 could be mostly covered without having to add too much extra in to cover fees and charges. Would a price of £99,999 be attractive enough to gain some offers. I completely understand this will not cover the debt but it's a loss she may have to suffer to be free from this stress.

Which suggested site, the land registry? Look at larger and smaller properties if none of a similar size have sold in the area in the last eighteen months. You need to look at quite a few to get an average, not one or two.

If you post the Rightmove link to your mother in law's house people can comment on both presentation or price, we are working totally in the dark at present. It's better to sell a house with some furniture, but depersonalising is very important - buyers need to be able to imagine themselves living there, which is tough with photos and ornaments that are not to your taste everywhere.

missile

arwalder wrote: »

..
Think if my mother in law was to move out and store/sell the furniture this would help..

MiL moving out would not help you get viewings and I would suggest better to leave some furniture. Empty houses are harder to sell.

The house is clean and all key areas in good condition but does need to be de personalised and de cluttered.

That would certainly help

seven-day-weekend

I would suggest that if the house has been on the market for three years, the price is almost certainly too high, especially if she is not having any viewings. Don't forget, she bought at the peak and prices have now gone down in most parts of the UK.

I know someone who bought a flat for £100,000 in 2007 and is now trying to sell it for the same. However other flats in the development are selling for £65k-£70k and one (admittedly needing work) has just gone for £55k.
There is no way the person selling fro £100k is going to get anything like that, their flat has nothing to commend it over othrs.

Maybe your mother's house is just priced too highly.