Buying a repo... what don't we know?

Manchee

We are first time buyers, have found a house we like and have had a second viewing, and we were interested in putting in an offer. We have a mortgage in principal through a broker, next step we were going to choose a solicitor. We have just today found out that the property is actually a voluntary repo (with the vendor now being the bank / building society). From basic research it looks like we will need to get to exchange as quick as possible due to the risk of being gazumped, but I had a couple of questions I was hoping people may be able to answer for us. Am I right in thinking that the estate agent will put a notice in the local paper announcing the offer and inviting any other interested party to counter offer? Is there anyway we could stipulate which paper this is to be advertised in (with a preference to a lesser read local rag.... cheeky I know but worth asking!!)? Is there anything else different from buying a "normal" property that we should know about / anything to consider?

jacko74

Assuming it is on Rightmove they will probably amend the ad online to say ''We are in receipt of an offer of xxx on the above property, any interested party.. etc etc''

You can ask them to remove all presence of it on the market but I doubt they will, they're working for the seller and the seller will want maximum exposure and price

eddddy

The bank has a legal duty to achieve the best price possible.

If they did something sneaky, like only advertising it is a strange place, they might end up having to explain to a court why they did it - and pay damages to the repossessed owner to cover their consequential losses.

Also, if it's been repossessed, it's possible that the property is in negative equity and the bank will not get all the money they are owed. So the more they sell it for, the more of their money they get back.


So don't expect the bank to agree to a bargain price.

Mrs_pbradley936

There is a great deal which is different.


The bank has a legal obligation to get as much as possible for the property and so you can expect a Notice in a local paper along the lines of " XWZ Estate Agents have been offered the sum of £xxxxxxx for 100 Great long Lane, Anytown. Any interested parties are invited to make a higher offer by the 44th of Next Month".


When you buy a property under usual circumstances the vendor will have filled in a form saying which utilities/services are there and what is included in the sale price. Everything from Carpets to loo roll holders. You will know if there have been any issue with the neighbours, who maintains the fences/boundaries and a host of other information.


You will be buying "as is" i.e no information other than the address and a brief description. You will have no redress if you made any assumptions such as you thought you owned the drive but in fact it belongs to the neighbour and you can only drive over it.

DandelionPatrol

Manchee wrote: »

We are first time buyers, have found a house we like and have had a second viewing, and we were interested in putting in an offer. We have a mortgage in principal through a broker, next step we were going to choose a solicitor. We have just today found out that the property is actually a voluntary repo (with the vendor now being the bank / building society). From basic research it looks like we will need to get to exchange as quick as possible due to the risk of being gazumped, but I had a couple of questions I was hoping people may be able to answer for us. Am I right in thinking that the estate agent will put a notice in the local paper announcing the offer and inviting any other interested party to counter offer? Is there anyway we could stipulate which paper this is to be advertised in (with a preference to a lesser read local rag.... cheeky I know but worth asking!!)? Is there anything else different from buying a "normal" property that we should know about / anything to consider?

Any attempt by you to reduce the exposure of this property to the market in a way which may result in the final selling price being less than it might otherwise be may result in the former owner having a larger debt to their lender.

Shame on you for attempting to profit even more from the misfortunes of others. What you suggest is corrupt.

sidefx

DandelionPatrol wrote: »

Any attempt by you to reduce the exposure of this property to the market in a way which may result in the final selling price being less than it might otherwise be may result in the former owner having a larger debt to their lender.

Shame on you for attempting to profit even more from the misfortunes of others. What you suggest is corrupt.

Bit harsh. Would you not buy a property just because it was a bargain?

The OP doesn't have any reason to do what is morally and ethically right, unfortunately we live in a dog eat dog world. There is no reason why the buyer shouldn't profit as many have before and are still doing so right now.

DandelionPatrol

sidefx wrote: »

Bit harsh. Would you not buy a property just because it was a bargain?

The OP doesn't have any reason to do what is morally and ethically right, unfortunately we live in a dog eat dog world. There is no reason why the buyer shouldn't profit as many have before and are still doing so right now.

I would buy a repo as a bargain, but I would be very conscious of profiting from someone else's misfortune. What I would not do is seek to profit even more from their misfortune. They are entitled to the return on their house from an open market. What OP suggests is not an open market.

Dog eat dog markets are for dogs and being a bit harsh about it is no real issue, because I am only being harsh on dogs.

PixelPound

Are you aiming to go in under the asking price? You may need to check how long its been available for. Often they won't accept anything less for the first month. They will amend any adverts on RightMove etc to stipulate if they are in receipt of an offer and how much.
You may need to get a solicitor who has done repo's, usually exchange and completion is done the same day, but not always. Are you buying outright or with a mortgage?

You say voluntary repossession, which is good as often its not and it has been known for the outgoing owner to sabotage the building, such as water pipes, or remove boilers, etc So there may be unexpected expenses.

PixelPound

sidefx wrote: »

Bit harsh. Would you not buy a property just because it was a bargain?

The OP doesn't have any reason to do what is morally and ethically right, unfortunately we live in a dog eat dog world. There is no reason why the buyer shouldn't profit as many have before and are still doing so right now.

Repo's aren't as profitable as they used to be, and many more are interested in buying them. No reason that OP shouldn't get it as cheaply as possible, but there are risks, such as getting into a price war (fake or real) and the fear of the call saying there is another bidder :rotfl:

Manchee

Thanks for all the replies so far. We think the house is on for a fair price given previous sales history in the road for the last couple of years, so we were going to offer the asking price, we were just more concerned about protecting against being gazumped and losing all the solicitors/searches fees and survey fees.

PixelPound

Manchee wrote: »

Thanks for all the replies so far. We think the house is on for a fair price given previous sales history in the road for the last couple of years, so we were going to offer the asking price, we were just more concerned about protecting against being gazumped and losing all the solicitors/searches fees and survey fees.

Its not gazumped in the usual sense. What happens, is if a higher offer comes in then you may be asked to up yours. This can happen right up until exchange. So you won't lose it unless you decline to increase. Of course if you have a mortgage, then it may require a revaluation (depending on the size of the increased offer).