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Are the sellers after a cheeky profit here?

Chloe88
Posts: 1 Newbie
Hiii.. I want to pick your brains out with a question.
We went to view a house today and we asked why it's being sold. The EA told us that he assumes it was a repossession which then got sold at auction. It was a couple that bought it but things got sour and so they're selling with no work being done to it.
So I decided to do a little research. Found out the couple had bought the house for £85k (which was the guide price) on 3rd September. It got put back on the market 6 weeks ago and price for the house now is £109,950.
Are the sellers trying to get a bit of a cheeky profit (considering they've spent no money ontop of the buying it)? Do you think it's worth going in with a low offer then asking?
Any advice would be great!
We went to view a house today and we asked why it's being sold. The EA told us that he assumes it was a repossession which then got sold at auction. It was a couple that bought it but things got sour and so they're selling with no work being done to it.
So I decided to do a little research. Found out the couple had bought the house for £85k (which was the guide price) on 3rd September. It got put back on the market 6 weeks ago and price for the house now is £109,950.
Are the sellers trying to get a bit of a cheeky profit (considering they've spent no money ontop of the buying it)? Do you think it's worth going in with a low offer then asking?
Any advice would be great!
0
Comments
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Do you need a mortgage to buy this property? If so lenders tend not to lend on properties that were purchased less than 12 months prior to the re-sale. Something to do with money laundering regulations.
Maybe they got lucky at auction. Maybe the estate agent has over-egged the price. Maybe the vendors live in cloud-cuckoo-land. Who knows?0 -
My guess is there's something you don't know about this property (or it is hugely over-priced).
Banks aren't allowed to put repo properties into auctions and sell them off cheap, without very good justification.
If nothing else, if the bank really did sell the house for £85k and it now resells for £110k, the original owner could probably sue the bank for negligence,0 -
If they bought it at auction, it's not unreasonable they are now seeking market value. (It's a different matter if it's not market value). Or it was a 'forced sale'. My sister sold her flat for twice what she paid two years after she bought it - the guy who owned it was about to be deported, so had set the asking price very low.
I've also seen odd deals in the past with two sales in short succession for significantly different prices that have been involved in avoiding capital gains tax.0 -
Property developers and/or investors regularly buy at auctions and the sell them on for their market value.
It is neither dodgy or illegal, it is a business.
Their business model is to buy at the lowest price they can and then sell to make a profit. sometimes they add value by doing up a property, sometimes, if they have picked up a real bargain then they don't bother doing my work, they flip the property.
It could be a main business or a sideline business. It could be just an ordinary person who is just having a little dabble And got lucky at the auction.
Generally the no mortgage rule is six months, not 12 and not all lenders are so picky.
In addition, there are exceptions and exemptions when the vendor is a property developer, developing and flipping for a business.0 -
Don't consider in isolation what else is around and selling at what prices?
Was it ever marketed prior to auction0 -
Offer £85k0
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Seems perfectly normal to me. You just have to watch a couple of episodes of "Homes Under The Hammer" to realise that there is profit to be made in buying cheap at auction, throwing a bit of cash at the house to pretty it up and re-selling.
Not sure what the problem is?0 -
lessonlearned wrote: »In addition, there are exceptions and exemptions when the vendor is a property developer, developing and flipping for a business.Seems perfectly normal to me. You just have to watch a couple of episodes of "Homes Under The Hammer" to realise that there is profit to be made in buying cheap at auction, throwing a bit of cash at the house to pretty it up and re-selling.
Not sure what the problem is?
The problem is that the sellers haven't (apparently) thrown any cash at it. A sudden uplift in value may be justifiable (from your lender's point of view) if it can be demonstrated that some sort of improvements have been made. Otherwise the recent sale price is likely to be taken to be the current value of the property.0 -
How do you know they have done nothing? There is more to renovating than splashing around a bit of magnolia. They may have fixed a hidden structural problem that meant it had to be sold at auction. It will sell for market price, which is always lower at an auction than via an EA.Been away for a while.0
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The house is worth what it's worth, based on what it is and where it is. The price somebody else paid for it however long ago does not affect the value one penny.
If you found out they'd paid much more, so were making a loss on it, would you be considering whether you should up your offer?0
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