Buying a repossession

milek

Hello,
I am looking for some advice in regards to buying a repossession.
I am a first time buyer with my partner in the North West.

First of all, the property we are looking at was sold early in 2007 for £140,000 (according to land registry) and then sold later on in that year for £125,000 (what could be the reason for such price drop and sale in such a short time?). The house is now for sale as a repossession for £90,000.

The house is in poor condition, looks like it had been neglected by the occupant such as plasterboard/doors damaged which looks intentional (a long while before or just before the occupant moved out I dont know). I am some what slightly concerned that the previous occupant could disturb us or cause damage after we have purchased (if we did purchase that is), is this something to be concerned over? It seems like a nice area.

In regards to the price, I could probably afford up to £95,000 should the bidding go over the asking price, however, if bidding went over what I could afford then would the survey fees etc simply be lost? What fees may be required before exchange of contract which could be lost? and the approximate cost of each fee?

Any help would be great,
Thank-you

CKhalvashi

A purchase several years ago was a neglected almost repo, worth about £240k on the open market, and we bid £200k. It's been bringing us in £1200 a month after £10k of work for the last 4 years, so can't have been a bad investment. We were a cash buyer, however.

We bought with agency survey, however I think that the vendors wanted it sold, rather than it goes to auction. If you're paying fees, then yes these would be lost.

There has been no damage to the property apart from a broken window (tenants child closed the door a little hard), so this is something that we don't feel you should worry about.

Best of luck with your first buy!

CK

katalyah

I have just lost about £600 on a failed purchase of a repo.

I was several weeks down the line and about a week from exchange of contract, I'd paid for searches and valuation (thankfully the survey hadn't happened or i would have lost even more) when another bidder came into the fold.

They pushed the price up by £11k and took it to beyond what I wanted to pay and beyond what the mortgage company were willing to lend for it so I had to pull out.

ALl I can say is it was very very stressful knowing that at any moment someone could come in and take it from under my nose and then having it happen. I would be put off a repo in the future.

Good luck with it but go in with your eyes wide open, have a very strict budget and stick to it. Oh and try not to let yourself get too attached to the property, its gutting when it falls through.

I have since had an offer accepted on another house.

sonastin

2007 was around the time the bottom fell out of the property market. The person who bought then could simply have overstretched themselves, maybe lost their jobs, bailed out and cut their losses before things got any worse. Or there could be a real sinister reason why they sold up at a loss and ran away - there's no way someone on the internet can tell you that one!

(assuming you're talking North West of England) You will need to pay surveyors and search fees before you are ready to exchange contracts. If the purchase of that house then falls through, that money is lost and you will have to start again on the next property. That is the same on any property, not just a repossession. The only difference on a repo is that the vendor is not allowed to have a conscience aobut you losing that money - they are obliged to take a higher offer if one comes in unless there is a strong reason to keep going with you (e.g. you are 1 day from completion and the new buyer can't provide substantiation that they can afford the higher price). A hard-hearted individual could just as easily let a new buyer gazump you and you would lose the fees you've paid on searches, etc.

You may also have to pay solicitors fees and mortgage arrangement fees - some companies will let you transfer these to a new property without additional charge, others will charge extra if your initial purchase falls through. You'll probably have to pay the solicitor a fee if you lose out on the first house and you don't then go onto find somewhere else instead.

milek

Thanks for the responses, I will put this into some further consideration. I'm sure we will at least give an offer, any further responses will be appreciated.

Olive_Oyl

If it's a repossession then usually the property is advertised in the local press & any other bids are sealed .

https://www.naea.co.uk/news/november-2013/naea-offers-advice-to-support-buyers-through-the-process-of-sealed-bids.aspx

" Quote "

For the best chance of being successful in your bid you need to be open about your situation and ability to purchase, and present your offer demonstrating your commitment and ability to exchange quickly. Your bid will not only be considered on the amount of the bid, but on how likely it is that you will complete without any problems.

As a FTB you have a great chance if you follow this milek ^^

Wishing you all the best .