Why are repossessed houses so cheap?

ladymarmalade222

Just wanted to get some opinions on repossessions. We have a house locally which was repossessed about 2wks ago and has come onto the market with a local estate agent.

I am absolutely gobsmacked at the price they have advertised it, £65,000. At first it had no photos so I presumed it had been ripped apart and had no kitchen/bathroom so would only attract cash buyers. The photos have now come online and it is a perfectly normal terrace property.

The going prices around the area is £87,000 - £100,000 hence the surprise about the price. Also will this have any reflection on neighbouring house prices when they come to sell.

Many thanks

xxx

Mrs_pbradley936

The mortgage may only be for that amount and so that is all they need and want a quick sale.

With these the agent has to put an advert in the local paper saying something like " Dubbinns and Whetherby have received an offer of £65,000 for the sale of 123 XYZ Gardens, and higher offers are invited by 10 working days time".

If they do not get any higher offers it is sold at the knock down price.

It is the person losing the house that is losing the money/equity not the mortgage people taking repossession. They have no interest in in selling for what it is worth just for covering the money owed on it.

Also it is almost always property investors/professionals that get these at cheap prices because most people have to sell a property and arrange a mortgage and cannot possibly arrange that within 10 working days.

G_M

1) theyoften go for far more than the askingprice

2) the seller (bank) wants rid of it fast

3) the condition may be atrocious - the 'owner' when repossessed may have demolished the interior in anger and/or ripped out the kitchen to sell (He's broke!)

4) the seller (bank) knows nothing about it's condition and can answer no questions - "Does the extension have planning consent?" "Don'tknow." "Doestheboiler work?" " Don'tknow". "Can I test the boiler?" "No,the gas is turned off for safety reasons."

you buy it 'as seen'.

ladymarmalade222

Thanks for the replies.

I know the lady who lived there had it from about 2004 so I was surprised to see it repossessed. It is one of the tidier houses on the street, hence the surprise about the price. The next door house sold 6 mths ago for £89,000, it was in a much worse condition and it sold within 2 days. It has always been a popular street.

Also I am suspicious of the Estate Agent as they have been known to be involved in underhand deals in the past.

Thanks everyone

xxx

Thrugelmir

ladymarmalade222 wrote: »

Also I am suspicious of the Estate Agent as they have been known to be involved in underhand deals in the past.

Lenders are under an obligation to obtain the best price on behalf of the debtor. The danger for purchasers is that they can end up in a contract race with another party. So incur legal costs and other expenses and lose all the money spent.

forgotmyname

If the owner could not keep up repayments then basic maintenance may have also been neglected.

Then you may get debt collectors knocking on the door. A mate bought one like that. And they were getting debt collectors for a long time.

Sometimes they accepted he recently bought it but the dodgier ones still kept returning asking for more proof.

You need to take this into account. May need to write formal letters to stop them calling.