Buying from an Bankrupt vendor - things to be aware of

davidmcn

GDB2222 wrote: »

I thought it depends on things like whether there's a working kitchen and bathroom, even though you might prefer not to use them?

Yes it does. Give us some more information about the current state of the property, we're just surmising from your description in the OP i.e. "non-livable standard...abandoned for years...terrible condition...significantly damaged". If it actually has a working kitchen and bathroom, the services are (probably) working, it's watertight and there aren't e.g. big holes in the floor or mushrooms growing up the walls, it might be ok.

g000444555

No mushrooms growing up the walls. As mentioned previously: "The property has been drained down and services shut down, the services cannot be turned back on until completion. We cannot offer any guarantees for the services." The latter statement came from the agency meaning that even if the kitchen is working I cannot verify it. There might be everything wrong with the property or there might be nothing wrong but I cannot verify it. The thing I remember is that even the washing machine's door was ripped off by the angry tenant. That's why I think ones services are back it would qualify as "under construction" temporal accommodation, however, I am almost 100% nothing will be fully functional, including the kitchen.

I don't have a family and no backup funds like parents. This is also a good thing in this case because I will have no one to trouble if I decide to move in early while it is not completely up to standards. Being alone has its merits.

I will definitely reduce the deposit so to keep comfortable cash if the worst case scenario unfolds. I do have a bit of craziness in me and like the DIY and the adventurous aspect of it.

SmashedAvacado

The trustee in bankrupcy is likely to want to keep the property on the market during the period post offer, prior to exchange- unlike on normal deals where the property comes off the market. It means that its more likely that you will get gazzumped at the last minute.

Davesnave

You will have to enlighten us as to what 'temporal accommodation' is.

I'm sure it could be accommodation in time, but I agree with Adrian that it will be someone who can evaluate this property, buy it outright for cash and then do the work themselves who's likely to make it into a bargain.

If you have only done DIY before you are likely to be over-estimating your skills and underestimating the timescales. I say this as someone who's renovated a sound, but outdated house with skilled help when required, which was frequently.

hazyjo

g000444555 wrote: »

However, I am not sure whether the bankruptcy of the vendor could affect me in any way.

Just to clarify this point in case it's what you were asking, debt relates to the previous owner, not the house itself. It won't affect your credit score and you won't be liable for their debt in any way. You may have to prove occupancy or when you bought it to outside parties looking to recover debt.

davidmcn

g000444555 wrote: »

As mentioned previously: "The property has been drained down and services shut down, the services cannot be turned back on until completion. We cannot offer any guarantees for the services." The latter statement came from the agency meaning that even if the kitchen is working I cannot verify it. There might be everything wrong with the property or there might be nothing wrong but I cannot verify it.

The services merely being turned off is unlikely to matter to the lender. That's normal for repossessions etc even if the property is in great condition. But they would have concerns if there are obvious signs of significant problems e.g. the pipes have been ripped out for scrap, or bare wires hanging out of the walls.

The thing I remember is that even the washing machine's door was ripped off by the angry tenant.

You're (probably) not going to acquire any title to the appliances anyway, and your lender isn't taking security over them. So that doesn't matter.

Owain_Moneysaver

g000444555 wrote: »

- The property has been drained down and services shut down, the services cannot be turned back on until completion.

Where have the services been turned off?

If inside the house they can probably be turned on at little or no cost - but you may need to wait until the gas and electricity meters can be reconnected.

If outside in the house, in the street, you may have to pay £1000+ for reconnection and wait several weeks for the road to be dug up.

Have you seen a recent survey that says the property is acceptable security for a mortgage? It may simply be unmortgageable in conventional terms.

Crashy_Time

What % price drop are you getting?

g000444555

The services merely being turned off is unlikely to matter to the lender. That's normal for repossessions etc even if the property is in great condition. But they would have concerns if there are obvious signs of significant problems e.g. the pipes have been ripped out for scrap, or bare wires hanging out of the walls.

There are no signs of such damage. The walls are clean. There's just some damage (doors ripped off, stairs needs additional support) and there are things thrown on the floor. After a good clean up I think it will look like a regular house. The garden is overgrown as well, but that's the easiest part. Not sure if the garden could affect the lender's decision as well but I guess I could try convincing them. Given the market the lenders are chasing the mortgage agreements at least that's my feeling so far.

If outside in the house, in the street, you may have to pay £1000+ for reconnection and wait several weeks for the road to be dug up.

£1000+ and 6 weeks of waiting is nothing comparing to the amount I am saving. But it's a good point to bare in mind though.

Have you seen a recent survey that says the property is acceptable security for a mortgage? It may simply be unmortgageable in conventional terms.

How can I access such information? Aren't the surveys private? Also, the property might be unmortgageable but I think it doesn't hurt trying. The agency is not one of the local known agencies so wasting some time is a tolerable risk, as in worst case they will just not recommend other properties to me if something collapses along the way (which I have the feeling might have already happened multiple times with previous buyers).

What % price drop are you getting?

20+%

Mind that there is a hidden trait in this property that is not easy to notice and potentially the current buyers haven't spotted. Don't expect me to reveal it in a public forum though (sorry).

[Deleted User]

You may well find its the bankrupted person that did the damage. It does happen. In which case they probably knew where to inflict the damage (like the stairs). Not normal for a tenant to do that. Holes in the wall yes, remove stair supports, not normally. There may be more damage than you are presently aware of (have you seen the fuse box etc).