Is a repossession worth the stress?

jmt

Hello all,

I am interested in a house that has just gone on the market. After viewing the pictures I could see it was a repossession, but made an appointment to view. The house has an asking price of £152,500, but I think this is a little high for the area as it is an ex shared ownership house (so bathroom and kitchen fittings are basic).

Whilst viewing I mentioned to EA that I thought the price was high, they agreed stating that they had valued at £145,000 but bank had decided to list at £152,500.

How nerve racking is it to buy a repo, the thought of having an offer accepted then left on the market whilst the purchase process progresses, I'm not sure if it is worth it.

gallygirl

How quickly could you progress? We bought a repo in 3 weeks fro viewing to completion, but with no mortgage. Yes, it was stressful, but at least it was condensed into a few weeks . Helps if you think you are getting a bargain, or you really like it. Good luck :T.

monty-doggy

The issue with this type of sale is that even up to a few hours before completion, someone can come in and outbid you, leaving you very much out of pocket/or having to increase your offer. The receivers have a duty to obtain the best possible price for the property and therefore it's marketed right up until completion, there isn't much you can do about it.

You need to work out the highest you would offer, regardless of what else happens, and then go in with that offer. If you feel it's overpriced, many others will too, and if you offer the top end of what's its worth, you are lowering the chances of someone outbidding you as they will end up over offering if that makes sense.

If it makes you feel more nervous than its worth, walk away.

In addition it's highly likely the survey will throw a lot up too as repo properties won't have had all the maintenance and care they should have in most cases.

Lou67

I am with monty. If you have nerves of steel and the price is fantastically low (the starting bid that is,) then go for it.

lessonlearned

I've just walked away from a repo for this very reason.

I was prepared to offer the full asking price but they still wanted to continue to market the property.

Not my idea of fair business practice. I stood to lose over £1k in costs if it all went pear shaped.

So I didn't take it any further.

It's still on the market - no takers.

Yet another instance that proves greed doesn't pay.

watkins101

lessonlearned wrote: »

Yet another instance that proves greed doesn't pay.

To be fair I think this is also for the benefit of the original owner, The people selling have to show they did everything they could to mitigate the original owners (and their) loss.

I walked away from a repo when they wouldn't play ball on the price ( I was upto 95% of the asking price) a week later they came back asking if I was still able to proceed and as it happened an almost identical house but not a repo came on the market 4 doors up that day, I viewed and made an offer the next day and the owners agreed the price 2 days later.

cheekychappy

Having not long completed on a repossession, I can concur with the nerves of steel comment. If it is your perfect home, then go for it, as ours was. If not, offer what you like and if you get outbid, then move on, but look to minimise outlay, such as a mortgage with a low application fee and free / low cost survey
We bought ours which was up with two agents, a national chain and the town's biggest independent. It was up for £175k which is very cheap for a 4 bed in the area, as the selling philosophy was to attract a lot of interest. We had always liked this style of house and it had fallen into a bit of disrepair, due to being a renter with no landlord maintenance but nothing paint and graft won't sort out in the short term.
As we lived very close to the property, we saw the locksmiths changing the locks, so remarkably found a buyer for our house with the only viewing from first time buyers whom offered just shy of the asking price, which we accepted on the basis of being ready to proceed.
The property then came onto the market with the independent and the national chain that sold ours, so we made an offer with the national chain to reflect what we believed the market value was, minus the works needed to bring it up to a good standard. Our offer was accepted and the ball started rolling, where the contracts were sent to our conveyancers and an exchange date set of 21 days and completion 7 days later. Anyway, it went to the public notice, which is unnerving as this is the point our hand was officially shown to the world. The day of exchange our buyers had still not come up with their mortgage offer as were using the slowest lender in the country, due to their circumstances, so we used our back up plan to remortgage our existing property on a BTL and use it as deposit. Took a couple of days to sort this out, as the mortgage we had already had to be tweaked to cover not taking all the value of our home.
Contracts were exchanged and all was cushty and we now live in the scruffiest Barratt Home in the street, but do we care !

All I would say is that you never seem to know who is pulling the strings...Northern Rock who were repossessing, or Savills who were selling it, Savills solicitors, the estate agent, the other estate agent?
The sellers pack is no more than a list of about 60 bullet points, saying sold as seen, no renegotiations on surveys etc, no relatives of the sellers etc. Access may be required for 12 months for a survey (rare to happen).
What made ours even more amusing was that the independent had told Savills we were timewasters as we had not sold with them last year and they even tried to accuse us of trespassing in the house before it was marketed, which made us all laugh and anyone we told. The independent's for sale board blew down in the wind on the first weekend and I suspect one thought the other had knocked it down, so a turf war followed with each agent uprooting each others signs every few days for the duration of the sale. Whether anyone bidded higher, lower or the same or what who knows, but it appears that the mortgage company sell the property trading off price vs time to complete, so highest price is not necessarily good if it would take 3 months to complete, but a reasonable price with a shorter completion time is better.

The phone call from our conveyancers secretary to say we had exchanged was so welcome and the one when we completed even better and it was fantastic picking up the keys from the independent, who attempted to be a little awkward, but we were prepared with id and a call to our conveyancers if needed.

Incidentally our rental was snapped up very quickly by an interloping couple, until he told his wife, but then another couple who had viewed took it, so we have barely touched the repo as were decorating the rental.

So you have been warned....

lessonlearned

Watkins - I understand this and fully agree.

In your case you were up to 95% of the asking price. In such cases the lender and/or vendor is perfectly within their rights to hold out for a better offer.

However, I was happy to pay the full asking price, as seen, with no request for reductions should the survey uncover anything unexpected. My offer stated this in clear and unambiguous terms.

If the asking price specified is met then that should be enough to clinch the deal. There can be no justification for holding out for more.

If they want to achieve more then they should say so at the outset. ie Offers over £XXX

monty-doggy

That's a great example! I'm glad it worked out for you in the end!

jmt

Thanks for all of your replies.

cheekychappy - lovely to read that everything turned out well in the end. I'm not sure I have the nerves of steel needed to go ahead.

I have placed an offer on the property at 7.5% lower than the £152,500 asking price, but this has been turned down by the bank outright stating that it has been on the market less than a week.

The property is not my forever home, but somewhere suitable to get us into the area. After a year or so it would be an ideal rental and this is why we are interested.

tim123456789

jmt wrote: »

Hello all,

I am interested in a house that has just gone on the market. After viewing the pictures I could see it was a repossession, but made an appointment to view. The house has an asking price of £152,500, but I think this is a little high for the area as it is an ex shared ownership house (so bathroom and kitchen fittings are basic).

Whilst viewing I mentioned to EA that I thought the price was high, they agreed stating that they had valued at £145,000 but bank had decided to list at £152,500.

How nerve racking is it to buy a repo, the thought of having an offer accepted then left on the market whilst the purchase process progresses, I'm not sure if it is worth it.

I saw a repo that was on at 95. EA admitted that she thought the price was OTT and that 85 would probably (eventually) secure it.

I passed as even at 85 the rooms were too small for my liking but I kept my eye on it and and after several months, and a second reduction to 85, it sold. So the EA was spot on.

So the moral is, the bank's first try will be "over priced" just in case they snag the person who "falls in love".