Advice on Buying a Cheap House.

trex227

Selling at auction has the effect of excluding a lot of buyers as anyone needing a mortgage is taking a massive risk buying at auction, so most auction buyers are cash. Therefore the highest possible  price may not be achieved.

I know someone who had their property repossessed and took legal action against the bank for not making enough effort to achieve the best price and got £40k from the bank (if I recall correctly it was due to not following up with the several people who made offers before repossession which were more than what the bank sold it for).

Selling by agent inviting higher offers when they get any is the standard way for banks to show they’ve made efforts to achieve the best price.

davidmcn

trex227 said:

Selling by agent inviting higher offers when they get any is the standard way for banks to show they’ve made efforts to achieve the best price.

Though always seems an odd logic to me - after all, if that's the best way of getting the highest price, why doesn't everybody do it? 

trex227

davidmcn said:

trex227 said:

Selling by agent inviting higher offers when they get any is the standard way for banks to show they’ve made efforts to achieve the best price.

Though always seems an odd logic to me - after all, if that's the best way of getting the highest price, why doesn't everybody do it? 

I know what you exactly what you mean as it seems in some circumstances houses in need of work make much more at auction than I can imagine they would make through an agent. Maybe it’s people getting carried away or that they’re not restricted by a lenders valuation but it’s definitely the case round here.

I guess with repossessions it’s so the lender can say “well it was on the open market and this was the best price we could achieve”

JGB1955

My daughter bought a repossession (with a NatWest mortgage).  There was a bit of nail-biting once they had put in their offer, which was probably £20K under the price for a 3 bed semi in that particular road, but they got it.  It had central heating, dodgy double-glazed windows (that opened inwards for some reason), a leaky conservatory BUT it was theirs!  They decided not to move in immediately and put in a new Kitchen before moving in a couple of months later.  The house has a HUGE garden and after ten years,  a massive  kitchen-diner-utility room- downstairs shower-room (and two children to enjoy it).  It was the only way they could have got on the property ladder - and worth all the effort.

Crashy_Time

davidmcn said:

BucketFull said:

is there anything that can be wrong with a house, whereby the law could prevent me living there unless it is fixed?

In practice not really, nobody's going to take much interest in an owner-occupier who chooses to live in a hovel. 

Depends on the area, some neighbours make complaints if bins are out on the wrong day, or if people feed birds for example.

BucketFull

Thanks for the info, trex227.

Don't be giving them any ideas, davidmcn! It's bad enough as it is! Haha.

That sounds like it could be my potential situation, house needing some not too major work doing, not moving in straight away to be able to afford updating/fixing it, move in after and it'll be mine and worth it!

I am more than willing to put up with fussy neigbours, Crashy_Time!

carefullycautious

It is a shame you cannot let us know which area you are looking at as sometimes houses don't sell due to other reasons. Lack of  Parking, odd layout, north facing leasehold etc etc. I would rather buy with these problems than risk buying somewhere really rough.
If you don't have anyone to leave it to could you try one of the companies that help you buy a better property which they take possession of when you have died. I forget the name of this but I am sure others will know. Not sure if it is home reversion companies/lifetime lease

Crashy_Time

If you are using cash I don`t think you should rush, it wouldn`t take much more than a small uptick in mortgage rates for your potential house to get much cheaper IMO. Why not see how the emergence from Covid/Brexit/Inflation expectations etc. pan out first?

BucketFull

Thanks carefullycautious. The area I am looking at is just normal and not 'rough'. I am not fussy about a lot of things that may be necessary to a lot of other people, so I have an advantage in this aspect. My main requirement is a limited location. Thanks for the home reversion suggestion, I had never heard of that before. I have had a quick search on the net and get the basic gist of it but would have to read more to understand it better. From the little I have read, I think ground rent is involved, which I am also trying to avoid, even though it is usually not a lot. This would make it not too different to buying a flat.

Crashy-Time, I cannot rush even if I wanted to! As mentioned before, I cannot afford a house at the moment and might only be able to do so in a few months' time IF I manage to receive some money from a credit card PLUS the amount I will have saved by then, which would be around the time of Brexit, so I have no choice but to wait till then anyway. If however, something that I could afford now were crop up, then barring something being seriously wrong with it, I would jump on it!

Unfortunately, as mentioned, houses in the same town are selling like crazy! For example, the other day a house was advertised on Rightmove and had been sold the very next day! Even if that was in the precise location I am looking for and it was £30,000 less (meaning I could afford it now), I wouldn't have stood a chance anyway. How is that possible anyway? Will the buyer not have done ANY checks, such as land registry, etc. or got a surveyor in?

BucketFull

Hi all.

Just an update. The first paragraph of my original post sums up exactly what ended up happening.

Thanks for all the replies and advice.