pitfalls of buying a reposession? help / advice
Discussion
Hello everybody,
I'm new at the property buying game so please excuse the dumb questions
I've been to look at a reposession ( the agent says it is a corporate client so I assume its a repo ) that I am interested in and am looking for advice on any pitfalls
I should try to avoid, all help most welcome please.
There doesn't seem to be any kind of seller pack so what info is missing? ( first thing that springs to mind is declaration of any neighbour disputes etc )
I've had a good look and apart from a couple of small damp patches at ceiling height seems pretty sound albeit scruffy, some tiles are dislodged that may have contributed to the damp, but it looks more like the property has been sat empty for a few months with no heat or ventilation, any thoughts?
The agent has said that if I were to make an offer the property would remain on the market until complete/exchange, now obviously I dont want to start spending on solicitors etc only to be outbid and lose my costs, so can I make removal from the market part of my bid even though its a reposession?
Should I be getting a survey before making an offer, ( or make my offer subject to the survey ) what
will the survey tell me that I haven't already seen for myself? ( although I couldn't get into the roof space as I didnt have a ladder with me when I viewed )
Please feel free to answer any questions that I havent asked! I have lots of stuff running through my head about it and didn't want to bore you all with it
thanks . . straker
I'm new at the property buying game so please excuse the dumb questions
I've been to look at a reposession ( the agent says it is a corporate client so I assume its a repo ) that I am interested in and am looking for advice on any pitfalls
I should try to avoid, all help most welcome please.
There doesn't seem to be any kind of seller pack so what info is missing? ( first thing that springs to mind is declaration of any neighbour disputes etc )
I've had a good look and apart from a couple of small damp patches at ceiling height seems pretty sound albeit scruffy, some tiles are dislodged that may have contributed to the damp, but it looks more like the property has been sat empty for a few months with no heat or ventilation, any thoughts?
The agent has said that if I were to make an offer the property would remain on the market until complete/exchange, now obviously I dont want to start spending on solicitors etc only to be outbid and lose my costs, so can I make removal from the market part of my bid even though its a reposession?
Should I be getting a survey before making an offer, ( or make my offer subject to the survey ) what
will the survey tell me that I haven't already seen for myself? ( although I couldn't get into the roof space as I didnt have a ladder with me when I viewed )
Please feel free to answer any questions that I havent asked! I have lots of stuff running through my head about it and didn't want to bore you all with it
thanks . . straker
We bought a repossession a few years ago.
Got a good price for it, it was taken off the market once our offer was accepted.
Problems were that some of the keys were missing, and it had some crap left in it, which the estate agents had to arrange to have removed after completion (It did mean that we kept what we wanted to - such as a fridge, bed and sofa).
There was some issue with planning, etc - but I think I would have had this whether it was a repossession or not, and used this to further reduce the price.
The state of repair of some bits of the flat were not good ... Again, I don't think this had to do with being a repossession completely. I had looked at normal flats for sale in worse.
Got a good price for it, it was taken off the market once our offer was accepted.
Problems were that some of the keys were missing, and it had some crap left in it, which the estate agents had to arrange to have removed after completion (It did mean that we kept what we wanted to - such as a fridge, bed and sofa).
There was some issue with planning, etc - but I think I would have had this whether it was a repossession or not, and used this to further reduce the price.
The state of repair of some bits of the flat were not good ... Again, I don't think this had to do with being a repossession completely. I had looked at normal flats for sale in worse.
Assuming its England or Wales, no different to buying a regular house, except for the lack of declarations from the owner.
Searches will show up anything material which be done by normal conveyancing. Disputes are always tricky areas anyway; you could do worse than popping round and saying hello to the neighbours.
Bottom line, some added risk but probably manageable and likely to be reflected in the price.
Searches will show up anything material which be done by normal conveyancing. Disputes are always tricky areas anyway; you could do worse than popping round and saying hello to the neighbours.
Bottom line, some added risk but probably manageable and likely to be reflected in the price.
I have bought 2 recently.
House remains on the market - it's a legal requirement. Anyone can make a higher offer until you complete.
The price i offered was advertised in the local paper (legal requirment)
" an offer of £xxxxxxx has been made on property at 15 sandy lane, sometown. If you would likem to better this offer then please contact the estate agent"
Someone made an offer above mine (5k), which i wasn;t technically allowed to know. I managed to trip up the estate agent, and she mistakenly confirmed the offer when i guessed it.
Me : "So if she;s made an offer of £x, then i just need to match it?"
EA : Yes
I matched it, as we were already well into the process (all solicitor and searches done) and were seen as the better buyer. You have to make sure the other offer is genuine, and not them just trying to push you up. I asked a lot of questions about the other offer, and kept asking the same questions, to check the story was straight.
The EA was getting a fixed price to sell the property, which is common with REPOs, so they had no interest in selling to someone else, other than me, as they had done all the work already.
I think it's a reasonably fair process to try and make sure the person who had the house repo's gets the best price, after all, they owe the money to the bank.
Otherwise, estate agents would just be selling them to their mates at ridiculous prices.
Alll in all, very stressful for the 21 days from initial offer, to getting the keys, but that's what you go through with repos, and why you can get a bargain. I paid 40 % less than it sold for in 2007!
House remains on the market - it's a legal requirement. Anyone can make a higher offer until you complete.
The price i offered was advertised in the local paper (legal requirment)
" an offer of £xxxxxxx has been made on property at 15 sandy lane, sometown. If you would likem to better this offer then please contact the estate agent"
Someone made an offer above mine (5k), which i wasn;t technically allowed to know. I managed to trip up the estate agent, and she mistakenly confirmed the offer when i guessed it.
Me : "So if she;s made an offer of £x, then i just need to match it?"
EA : Yes
I matched it, as we were already well into the process (all solicitor and searches done) and were seen as the better buyer. You have to make sure the other offer is genuine, and not them just trying to push you up. I asked a lot of questions about the other offer, and kept asking the same questions, to check the story was straight.
The EA was getting a fixed price to sell the property, which is common with REPOs, so they had no interest in selling to someone else, other than me, as they had done all the work already.
I think it's a reasonably fair process to try and make sure the person who had the house repo's gets the best price, after all, they owe the money to the bank.
Otherwise, estate agents would just be selling them to their mates at ridiculous prices.
Alll in all, very stressful for the 21 days from initial offer, to getting the keys, but that's what you go through with repos, and why you can get a bargain. I paid 40 % less than it sold for in 2007!
I bought one last year. The main problem is the fact the property remains on the market until exchange. Is it on the market with just the one agent?
The house was on with two but ours was fantastic and agreed for both not to proactively market the property and if someone insisted on a viewing they were disinterested whilst doing it.
You can try and play hardball at the start and insist the property comes off the market which won't be accepted but as soon as you start proceding they probably won't accept any offer unless it is 15k over yours as they want it off their books and don't want to return to square one especially if you prove how keen you are and that you are not going to knock them down on survey results etc. I know they turned down an offer of 10k more on ours after we had had the survey done which was good of them.
it is slightly more stressful than buying a normal house but the rewards normally outweigh the risk
goodluck
The house was on with two but ours was fantastic and agreed for both not to proactively market the property and if someone insisted on a viewing they were disinterested whilst doing it.
You can try and play hardball at the start and insist the property comes off the market which won't be accepted but as soon as you start proceding they probably won't accept any offer unless it is 15k over yours as they want it off their books and don't want to return to square one especially if you prove how keen you are and that you are not going to knock them down on survey results etc. I know they turned down an offer of 10k more on ours after we had had the survey done which was good of them.
it is slightly more stressful than buying a normal house but the rewards normally outweigh the risk
goodluck
A good friend has just tried to buy a repo. Started with sealed bids, he was informed he was the winning bidder, 2 weeks before exchange he was informed another bid had come in. 10k later and he had the winning big again.
Then 2 days before exchange, estate agent rang asking for 2k increase due to another bid. By this point he was fed up to say the least and pulled out!
Then 2 days before exchange, estate agent rang asking for 2k increase due to another bid. By this point he was fed up to say the least and pulled out!
Aviz said:
Someone made an offer above mine (5k), which i wasn;t technically allowed to know. I managed to trip up the estate agent, and she mistakenly confirmed the offer when i guessed it.
Me : "So if she;s made an offer of £x, then i just need to match it?"
EA : Yes
Just to clarify this point, most of the managing clients (between the estate agent and the bank) allow the person who triggers the public notice to know how much has been offered as everyone else is able to see their offer..Me : "So if she;s made an offer of £x, then i just need to match it?"
EA : Yes
Dont rely on the sellers (pre-contract enquiries) info as it will mostly come back with "don't know" or "not known"
If you are going to make an offer, take with you (or send) copy of your agreement in principle for your mortgage, proof of deposit and name and address of your solicitor.
It will mean the agent can send your offer straight through with proof of funds.
Speed is the most important thing when buying a repo, use a good local solicitor, someone you can go and see to sign documents.
If you need any other advice feel free to pm me (i sell repos for a living)
jamescodriver said:
Just to clarify this point, most of the managing clients (between the estate agent and the bank) allow the person who triggers the public notice to know how much has been offered as everyone else is able to see their offer..
Dont rely on the sellers (pre-contract enquiries) info as it will mostly come back with "don't know" or "not known"
If you are going to make an offer, take with you (or send) copy of your agreement in principle for your mortgage, proof of deposit and name and address of your solicitor.
It will mean the agent can send your offer straight through with proof of funds.
Speed is the most important thing when buying a repo, use a good local solicitor, someone you can go and see to sign documents.
If you need any other advice feel free to pm me (i sell repos for a living)
Great advice, although they categorically said i couldn;t know the other offer to start with. She put it in on the day that my offer appeared in the obscure local property paper, so she must have been waiting to see what i had offered. I had a Mortgage in principle ready, and went straight from the first viewing to the EA with it. My solicitor was local, so every time there was anything needed, i just popped in rather than waiting for the post. I could have completed within 14 days of first seeing the house, had the mortgage company not forgotten to remove the clause stating that i had to sell my other house first. I still did it within the 28 day limit that is usually imposed with repos, even after having to up my offer slightly and get a new mortgage agreed.Dont rely on the sellers (pre-contract enquiries) info as it will mostly come back with "don't know" or "not known"
If you are going to make an offer, take with you (or send) copy of your agreement in principle for your mortgage, proof of deposit and name and address of your solicitor.
It will mean the agent can send your offer straight through with proof of funds.
Speed is the most important thing when buying a repo, use a good local solicitor, someone you can go and see to sign documents.
If you need any other advice feel free to pm me (i sell repos for a living)
I didn;t actually understand the whole "public notice" system when i bought my first house, and it was stress free. I put an offer in, they accepted, and it all went through without any issue. I sometimes wish i didn;t understand it when i bought this one either
. Edited by Aviz on Wednesday 2nd November 13:55
Our last house was a repo - got it for a good price.
Had to complete within 28 days which was a bit tight, property stayed on the market right upto exchange. Didnt happen in our case but the agent told us they might run an advert in the local paper stating what we had offered and inviting higher offers. Three years later we still got debt collection agency calls/letters etc as well.
Good luck, it'll be a kneee trembling time for you
Had to complete within 28 days which was a bit tight, property stayed on the market right upto exchange. Didnt happen in our case but the agent told us they might run an advert in the local paper stating what we had offered and inviting higher offers. Three years later we still got debt collection agency calls/letters etc as well.
Good luck, it'll be a kneee trembling time for you
thanks for all the replies, it is as far as I know with just the one agent, already been reduced a bit so I think they are keen to sell too. Apparently no other offers so far ( which gets my brain wondering why not? whats wrong with it!? ), I'm running it by a few friends first who have a little more experience of these things too just to try to re-assure myself about going for it
I'm guessing since it's a bank selling I won't offend anybody with a low starting offer, but how low?
I'm guessing since it's a bank selling I won't offend anybody with a low starting offer, but how low?
also if you have a weak agent you can sometimes pump them for information as to who theirr corporate client is and thus you can see how hardball they play (they normally have a bottom line for the property beyond which they wont go). I made an offer on a repo and knew roughly the sort of numbers they would be interested at aafter some research but we didnt end up progressing it in the end.
in the alternative it might be worth spending a couple of quid to get the official copy off the land registry to see who the vendor is and how they play the game...
in the alternative it might be worth spending a couple of quid to get the official copy off the land registry to see who the vendor is and how they play the game...
straker said:
interesting, even if I did know the name of the vendor, how would that help me know their policy? It's not like they print this stuff on their website is it? Like I say I'm all new to this so making it up as I go along . . . with ph help of course
You can find out the last price this property changed hands at - usually fairly recent.And you find out which bank is doing the foreclosure.
Just information you may be able to use to guesstimate what the lower range of an acceptable offer may be.
Aviz said:
Great advice, although they categorically said i couldn;t know the other offer to start with. She put it in on the day that my offer appeared in the obscure local property paper, so she must have been waiting to see what i had offered.
I don't see why the higher offer should be secret if they advertise your offer?I guess there are no hard and fast rules as they don't always get advertised, but if they did advertise it, wouldn't they have to do it again if a higher offer came in, therefore disclosing what the offer was?
They only need one Public Notice to be set up as all other offers will be made on that. Even if the sale falls and the property is remarketed if the next offer is more than the original Public Notice, they wont have to publish another one.
A lot of the management companies are tending towards Rightmove for these notices now, as paper advertising is a) expensive b) declining
A lot of the management companies are tending towards Rightmove for these notices now, as paper advertising is a) expensive b) declining
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