Repossession going to auction

SquatNow

Has it been on the market with the mortgage company or was the "owner" trying to sell it at first?

Note that the property dropping in value (like all properties) may well have triggered off a clause in the contract. The bank may be able to keep it on the market as long as they like while it's holding it's value, and maybe even drop the price as long as they are still getting enough to pay off the outstanding debt, but once it starts to lose value the contract terms will cut in and force a sale.

lenny83

Ahhh, I see what you mean.

It has been on the market with the mortgage company for the whole time, and it is marketed by two estate agents at the moment. The price hasn't dropped by huge amounts, but by about 20k over the year. The house is 2 years old and I wouldn't say it's cheap or a bargain, we just like it.

Hopefully the solicitor will say its possible to exchange before the auction. The thought of bidding on it at auction terrifies me! Although OH is starting to like the idea!:eek:

SquatNow

You'll probably pay 20-30% less at auction... possibly even 40% less.

New builds drop in value by 25% when you move in.

The bank will be hoping to get back enough to cover the mortgage.

Unless the buyer had an 80% mortgage, the bank will have started out trying to recover 5% more than the property was worth.

Then they dropped the price to try to secure a sale.

Personally I wouldn't be buying now. Prices will drop SIGNIFICANTLY in the next few months... far faster than in the last crash. Effects that softened the last crash are reversed this time and will make this crash steeper.

Nothing stops you waiting to see what happens. HSBC predics 30% drops vs wages. Mervyn King of the BoE says prices wont rise for a few years. DYOR.

lenny83

Lol.. I wish I could wait until the auction to see what happens, but haven't got the bottle! Do they not put a reserve on houses so they only sell if they reach a certain price? Never been to an auction!

I just can't see it selling for 20-30% less than it's for sale at now..it's a 4 bed detached in a good area so I feel there would be loads bidding for it if it was that cheap

lenny83

Also, the property was a buy to let, don't they have to put down a bigger deposit than normal mortgages?

SquatNow

lenny83 wrote: »

Also, the property was a buy to let, don't they have to put down a bigger deposit than normal mortgages?

No. In fact lots of BTLs were 100%, especially during the time you state this proprty was purchased

SquatNow

lenny83 wrote: »

Lol.. I wish I could wait until the auction to see what happens, but haven't got the bottle! Do they not put a reserve on houses so they only sell if they reach a certain price? Never been to an auction!

I just can't see it selling for 20-30% less than it's for sale at now..it's a 4 bed detached in a good area so I feel there would be loads bidding for it if it was that cheap

They will normally be offered at auction the first time with a reserve, and if it doesn't reach the reserve, again either with a much lower reserve or again with no reserve.

At auction now at least 30% arn't reaching the reserve.

It's all gone to crap... there are way too many sellers and no buyers. Sellers are holding out for a miricle and buyers are sitting on their hands waiting for a bargain. And smart buyers just signed a 2 year rental agreement.

Running_Horse

SquatNow wrote: »

Personally I wouldn't be buying now.

You won't be buying ever.

silvercar

Max mortgage on a BTL is generally 85%, though there were the odd company offering 90%.

What the house was worth is irrelevant, its all about what it is worth now. Whoever is controlling the selling process will be out to maximise the price achieved, but wary of timescales.

I would guess that after 3 weeks you've not done searches and that is making the selling company nervous. Hence the decision to go with the auction.

neverdespairgirl

It can all be done fast, if solicitors pull their fingers out.

My LL saw the flat I live in one day, offered the same day, exchanged 5 days later, and completee 3 days after that. So seeing it to completion in 8 days.