Advice on buying Repossession needed by morning

t_i_g_e_rr

I was recomended to start a new thread after posting here:
http://forums.moneysavingexpert.com/showthread.html?p=6588937#post6588937 so here goes:

Please forgive my panic, but I have been asked to make an offer on a repossession property tomorrow morning, "possibly best and final offers" (I was told this today at my first viewing). I don't know what I am doing.

I know it has been on the market for just over 1 week. It is basically sound but needs a kitchen and central heating (boiler and radiators taken). It is a 3 bed mid terrace, town centre location. I am told there are a number of investors interested. It is up for 84,950. According to hometrack it is worth 109,000 (but obviously this is for a house in good repair).

I am a cash buyer. I notice a recommendation here to offer a starting offer of 10% less (i.e. £76,500). Is this wise in this situation. I am told the property has "a lot of interest", but is this just estate agent speak? I was thinking of offering 78k - 80k.

Any advice (especially quick advice) greatly appreciated.

t_i_g_e_rr

Replies from other thread:

Guy_Montag wrote: »

My advice

Guy_Montag wrote: »

1) Start your own thread, you'll get more response,
2) best & final offers is not the same as haggling with the seller (which is the 10% thing), the rules change, you get one chance.
3) Only you know what the place is worth to you. You know what comparable houses are like, you have to decide.

Just to make it more fun imagine the countdown clock ticking down - have you made your mind up yet?

err. wrong thread, but most of the advice is still good

Doozergirl wrote: »

If it's only those two things wrong, then the asking price sounds like a good deal, especially if there are many interested parties.

Doozergirl wrote: »

You can always wait to find out what the 'successful' offer was and then go in higher. Best and Final does not really exist when it comes to repo's. The lender is obliged to consider all offers.

What you do need is a mortgage approval and proof of deposit - the bigger the better in these circumstances.

t_i_g_e_rr wrote: »

Thanks for quick responces.

t_i_g_e_rr wrote: »

Cash Buyer? I can sign just as soon as they want. Any idea how much this will count for? (this is more of a general question I suppose).

I'm going to start a new thread. Thanks. http://forums.moneysavingexpert.com/showthread.html?p=6588965#post6588965

Doozergirl wrote: »

Cash is KING with repo's and may win you the property over slightly higher offers that will need mortgage finance. You will need proof of funds to show, probably with your offer.

t_i_g_e_rr

I'm trying to think like an investor. But I'm not, so it's hard. Can anyone advise me how investors might be thinking? Would the following sums seem fair for an investor?

A1 Resale Value... = 109,000
Resale costs 2.5%... = 2,725
Surveys, etc........ = 1,000
Building Costs..... = 10,000 (conservative)
Finance (9mnth/6.5%) = 4,500
Profit @ 12%....... = 13,000
Therefore, offer... = 77,775

That would be 8.4% below the 84,950 asking price.

Sorry to ask such specific questions. But if anyone can help, I need it. Thanks in advance.

Doozergirl

You want to sell it on?

Yes, that's how I'd think though future value should be conservative and building costs generous. If it's a central heating system and a kitchen then you're only talking £5000 including paint and carpets on a modest property. I wouldn't expect to get this particular property at that price though. No reason not to try, admittedly!

david29dpo

I simply work backwards. Find out a selling price and stick to it. Take off buying and selling costs,building costs and loss of interest. Then your minimum profit to make it worth your while and you have your offer price.

mrtg0525

I'd go with david29dpo's advice - it's the EA's job to extract as much money from you as possible, so of course he's got "plenty of interest" and "offers on the table".

If you look at it from an investment point of view, you need to determine how much you can afford to pay for the property so you can make some money off it. If some other mug pays more, well, that'd quickly turn into their problem I'd say.

IveSeenTheLight

david29dpo wrote: »

I simply work backwards. Find out a selling price and stick to it. Take off buying and selling costs,building costs and loss of interest. Then your minimum profit to make it worth your while and you have your offer price.

Remember to add in a touch of contingency for things you will have forgotten about or time to take to sell the property

t_i_g_e_rr

Thank you all for replying. It is a great help.

Doozergirl wrote: »

You want to sell it on?

Actually, probably not, but I have to value it somehow. The people I am likely to be up against on this property are investors, so this seemed a good way to do it. I think you are right, my build costs are probably a bit high.

mrtg0525 wrote: »

If some other mug pays more, well, that'd quickly turn into their problem I'd say.

I must admit, I am thinking like this. I don't need this property. I am concerned about the news about house prices, so I want to factor this in. I think I will offer a price and not worry too much if I lose it.

macaque_2

Tiger

You are asking us to try and read the minds of the other bidders which no one can do. Your bid should reflect your personal desire for the property. If you have a particular wish to buy and live in it, offer something near the market price. If not, put in a low speculative offer and don't feel bad if you lose it.

t_i_g_e_rr

The "phone call to come tomorrow morning", or Thursday, actually came later Friday morning, and the call said all offers need to be in by Tuesday 12:30. Not quite the panic I thought. Hey, anyway...

I have put in an offer of 78,000. I would be happy to go up to 80,000. The estate agent wanted to know what my best offer would be. I didn't know whether I should tell him, so I told him to come back to me if I was rejected.

So, I need to confirm my best offer by Tuesday. I am told it is "best and final offers, but not sealed envelope." Even so, I can still make another offer if I’m rejected can't I? I know he can’t tell me what the offers are, but do you think I would be wise to tell the Estate Agent "I still want to offer 78, but if putting in an offer of up to 80 would help, could you come back to me?" Would that work? What questions can I ask?

Thanks in advance. Everyone’s advice so far has been a great help.

scottn

dont tell the estate agent you would pay 80.

'cos then even if you were highest bidder at 78, you will pay 80 and he will make more % commission on the sale. okay, not all estate agents are like that...but u never know.

tues, offer 78k, cash buyer, looking for quick exchange. open for acceptance until friday.

remember that everyone offers round figures, 77500, 76000, 76500 etc, why not play around and offer something like 78101 etc?

and if you don't get it, remember my moto "there is always another flat"