Purchasing a property that requires improvements

Albermarle

Sapindus said:

It doesn't seem likely that you could buy a house "worth" £250k, spend £30k on it, and it's magically "worth" £35k more than you've spent in total.

You obviously have not watched many episodes of 'Homes under the Hammer' 

Bookworm105

Fluffy_Donkey said:

I think the bank have valued it based on the mortgage remaining from the owners it's been repossessed from. Im sure from the legal pack the bank can only take upto 250k which surprised me but im new to all this. 

When valuing a house for sale during a repossession, a bank has a legal duty to obtain the "best price reasonably available" for the property, meaning they must strive to achieve a fair market value and not deliberately undervalue the house to quickly sell it off. This is considered a duty of care owed to the borrower, even though they are in default on their mortgage.

it is priced at 250k because that is what they think it is worth in its current condition not because that is how much to the penny that the borrower owes them

lincroft1710

As has been pointed out in previous posts, the bank are duty bound to get the highest amount possible. So even if they accept your offer of £250K, they have to advertise this and someone could come along, offer more and the bank would be obliged to accept this second offer