Repossession

TANZA_2

My BF and I are hoping to buy a house which has been repossessed. It has been up for sale for about 4 months for £175000. It needs at least £20000 of work doing to it. The price has been reduced to £169950. We put in an offer of £152000 as the last house which is near it -more or less the same but with new kitchen, bathroom, went for £173000 in July. The estate agent said the bank had rejected the offer saying another offer had been made which was slightly higher but not much but we were in a stronger position as we don't have a house to sell. What sort of offer should we make? We plan to stay there for at least 4 years if we can buy it.

The estate agent said the bank wants nearer the asking price but people have stopped viewing as it's been up for 4 months so anyone who was interested has either bought elsewhere or got fed up with waiting.

Also, apparently, even if our offer was accepted and we got a survey done ( for the mortgage) and incurred solicitor's fees it has to be advertised for 28 days and someone could come along and put in a higher offer.

What are your views on repossessed houses-is it worth the hassle and how many get 'gazumped?

devils_advocate

And you believe the estate agent?

franklee

Could be wrong but I think they put a time limit (28 days?) on the time allowed from offer accepted to completion. Therefore they would rather not wait for someone relying on selling their existing house first. As you don't have house to sell your position is far stronger. I'd simply point that out to the EA and restate your existing offer together with proof you have funds in place now etc. Do not underestimate the value of this to the lender selling who wants to shift this repossession!

lypsey

Tanza , ask yourself why the house has been repossessed . It is because the housing market is completely swamped and is about to sink. Don't get into haggling just sit and wait . I would wager that in the next 2 to 3 years you will buy a similar house much , much cheaper.
Interest rates are rising , inflation is out of control , house prices compared with salaries are at an all time high , oil prices are at an all time high, the BTL market is about to crash as too many people thinking they could make easy money have kept the market alive for too long.

Don't panic , just be patient and save yourselve a s££t load of money in the mean time
I wish you good luck

TANZA_2

Thanks for all that. Our offer of £152000 has been rejected and we've put in an offer of £154000 and are now going to 'sit' on it after reading this. I think you might be right about house prices dropping but as there's a shortage of this type in our village then I can't see them falling dramatically-supply and demand I think.Anyway, I'll post when something happens to let people know what happened.

TANZA_2

Forgot to say the reason why the house was repossessed is that the guy who owned it has a history of debt and actually ended up being a advisor for mortgages for people who couldn't get mortgages! He also had a CJJ against him as he squatted in a house he wanted to buy-the people gave him the key before money exchanged-he said he wanted to paint. Then he and his wife squatted for months until the bailifs threw him out. They still owe £5000 for that.Then somehow he managed to get this house 7 years ago. I guess he's mortgaged himself up to the hilt and the bank is trying hard to recoup their loss. It's a small village so news gets round.

plane_boy2000

Tanza - if they reject your offer sit tight. When repos are sold they leagaly have to put a notice in teh local paper giing people a further 7 days (I think) to improve the offer. This is all done as the bank have to prove that they obtained the best possible price for the house and acted in the owners best interest - i.e. they didnt sell a 200K house for 75K as that was all they were owed.

Iypsey - your post made me LOL - how can you say that inflation is out of control ??? Its currently 2.4% a fall from 3.1% in March. The BOE have predicted a further fall to around 2% over the next 6 to 12 months. Interest rates at 5.75% is hardly a shocker, and nothing compared to what has been seen in the past. Oh yeah, and Oil prices are falling - they are not at an all time high, they peaked at about $80 about 12 months ago and are now about $72 - by my maths thats about a 10% reduction over 12 months.

lypsey

Planeboy
I am very glad I gave you a chuckle however back in the real world

http://newsvote.bbc.co.uk/1/hi/business/6936292.stm
It says "Australian interest rates are at their highest level for more than 10 years after the country's central bank raised them by a quarter point to 6.5%." This is due to global inflation, if you take a few minutes to read about the ECB or the US they are concerned about inflation , why do you think we should be any different. Our Government fiddle the inflation figures but I guarantee you we are in an inflationary era


http://newsvote.bbc.co.uk/1/hi/business/6928818.stm
It says Oil prices have fallen back slightly after hitting a record intraday high of $78.77 a barrel on Wednesday

http://news.bbc.co.uk/1/hi/business/6902298.stm
Despite rates hitting their highest level for six years, many analysts are warning that increased crude oil costs and steady, if not stellar, economic growth will force the Bank to lift borrowing costs to 6% after the summer


Take a look at food prices or clothing prices and as I have said oil prices , you are kidding yourself if you think inflation will fall

Dead_Eye_Jones

lypsey wrote: »

Take a look at food prices or clothing prices and as I have said oil prices , you are kidding yourself if you think inflation will fall

My tescos bill is lower than ever, clothers from Primark et al are cheaper than ever. My energy bills have dropped, my communication bills have dropped. Yes I guess bread is more expensive but I think most of us can absorb the extra 10p a week (40p a month).

I know that inflation is supposed to be high, but my monthly spend is at an all time low (I have spreadsheets to prove it !). Maybe thats because im such a great MSE! Maybe I dont live in the real world - thank god for that then!

Another interesting point, as explained to me in Time magazine, oil and petrol prices arent as highly correlated as some like to think. There was an article about the US (seeing as we're talking global) petrol prices dropping despite rises in Oil. I didnt read it too closely but understand its related to refinement (ie oil into petrol).

Anyways GL to the OP .

lypsey

Planeboy and Deadeye

Here is todays BoE inflation report

http://www.bloomberg.com/apps/news?pid=20601087&sid=aDHfHa6YURD4&refer=home

It says "The Bank of England is weighing the risks to inflation as higher commodity costs and domestic economic growth push prices higher. At the same time, turmoil in global credit markets has increased the cost of borrowing for companies while consumers are shouldering record debts"


It also says "While ``upside risks'' to inflation have ``diminished somewhat,'' the bank pushed back by about a year the date when inflation will drop below the 2 percent target." What a cop out , why don't they say inflation will rise AGAIN in the short term

http://uk.biz.yahoo.com/07082007/140/disasters-2007-food.html
I am in the meat trade and work for a very big European manufacturer and I can tell you that the cost of feed has doubled over the last 9 months , if i tell you it takes 20kgs food to get 1 kg meat it doesn't take a genious to work out where prices are going . Also think about not just bread but all the other articles wheat , barley etc go into.

oasisfeverish

Sometimes the reason why the EA is saying your £152k is not good enough is in repro properties the lender wants to get back their cost as a minimum.

So probably the EA stating there has been another 'slightly higher offer' is because the outstanding mortgage is greater than £152k.

If you know anyone that has access to credit searches, they may be able to see what the debt is?

I used to work in a bank and did this when I bought a repro. It was on for £65k, EA said £60k had been rejected, was going to offer £63k, until I did the search and found out £61,995 of debt registered against previous owner. So offered £62k and was accepted.

Might be worth a spin by saying this to the EA and saying look the lender wants to get back their cost, so find out what it is and I'll offer that amount. Do try and get some proof though, as the EA could inflate this figure.