Buying from a property buying company?

Cuddl3s

Hello everyone, 

I have a bit of a dilemma and wanted to get peoples thoughts on it, I have been looking to buy a house and have settled on a house that is being sold by one of them house buying companies that buy property for cheap and then sell them on to make a profit. 

The issue I have is that the price the company paid for the property is now showing on the prices paid gov register so when I will come to sell it my buyers will be able to see the cheaper price the company paid for it just months before I bought it. The price they paid 6 months ago is 12.5% cheaper than what I have agreed to pay for it.

House needs quite a bit of work, around 20% of purchase cost of the house would need to be invested into to it for various repairs and for small updates just to bring it to a regular spec.

I anticipate that the value of the house after I do the updates will just about break even with what I will have in it.

Now the question is, if you were looking to purchase a house and noticed that on the property's transaction history would that put you off or would it influence you into making a lower offer on it then you otherwise would have if that lower purchase price wasn't listed on there? 

Any thoughts? 

user1977

How quickly are you planning to sell it? The value x years ago isn't really here or there.

I would be more concerned about what its current value actually is - are you getting a mortgage?

housebuyer143

Not really. I would assume there was a reason for it, either a break up or just that the sellers wanted to sell it fast. I wouldn't use the previous purchase price, especially one before you bought it as a way to reduce the price. I would just look at the current market when I was buying.
I would actually be more worried about the very quick successive transactions if I were looking and saw this, rather than the price.

Brie

I think the only time this is relevant is when you are making an offer on a price.  If you think you have offered too high then you could revoke your offer and give another a couple of % lower.  They might not accept.  

I think also that most people expect prices to go up.  So no big surprise that you pay more than the last purchase and the person you sell to in however many years will hopefully pay more than you did.  Sometimes there are blips but not many.  And if when you come to sell anyone asks you can tell them that the previous occupant (as opposed to the company that owns it now) needed to sell fast hence the low price.  

GDB2222

Brie said:

I think the only time this is relevant is when you are making an offer on a price.  If you think you have offered too high then you could revoke your offer and give another a couple of % lower.  They might not accept.  

I think also that most people expect prices to go up.  So no big surprise that you pay more than the last purchase and the person you sell to in however many years will hopefully pay more than you did.  Sometimes there are blips but not many.  And if when you come to sell anyone asks you can tell them that the previous occupant (as opposed to the company that owns it now) needed to sell fast hence the low price.  

At the moment, though, I rather expect prices to drop.  The number of transactions has decreased, as owners are often not yet prepared to accept what buyers can afford to pay.  

Cuddl3s

user1977 said:

How quickly are you planning to sell it? The value x years ago isn't really here or there.

I would be more concerned about what its current value actually is - are you getting a mortgage?

Hi, thank you for the reply, I plan on staying here for about 2-3 years but we never know what's around the corner, it is a cash purchase.

Value wise it's hard to tell as it's on an estate where most of the other properties are owned by a housing company, my best guess is that it is probably around what I offered as if I invest the money to do it up I would likely break even but don't think I'll make any profit. Same size house few doors down sold in January for price it would cost me to do up.

Current value if done up would just break even I would think.

Personally I would have offered less than my original offer had I known the price they bought it at and especially that it would be put on that register but I thought maybe I'm just being silly so thought I would ask the opinion of some potential buyers to figure if I'll run into issues when I come to sell it.

Cuddl3s

housebuyer143 said:

Not really. I would assume there was a reason for it, either a break up or just that the sellers wanted to sell it fast. I wouldn't use the previous purchase price, especially one before you bought it as a way to reduce the price. I would just look at the current market when I was buying.
I would actually be more worried about the very quick successive transactions if I were looking and saw this, rather than the price.

Thank you for sharing your opinion.

Cuddl3s

Brie said:

I think the only time this is relevant is when you are making an offer on a price.  If you think you have offered too high then you could revoke your offer and give another a couple of % lower.  They might not accept.  

I think also that most people expect prices to go up.  So no big surprise that you pay more than the last purchase and the person you sell to in however many years will hopefully pay more than you did.  Sometimes there are blips but not many.  And if when you come to sell anyone asks you can tell them that the previous occupant (as opposed to the company that owns it now) needed to sell fast hence the low price.  

Thank you for sharing your opinion, yes if it were a rising market of a year ago I wouldn't have worried much about that I but at the moment i'm very conscious of not over paying as I fully expect prices to go down at l least in the near future(1-2 years) as where I am there been loads of reductions the last couple of weeks including distressed sales (people that are selling nice homes in just under 2 years) for the same price they paid 2 years ago.