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Repossessed by bank. Needs work.


Kaz Rugman

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Hi

 

My partner and I are just looking to buy our first home.

We viewed a property near the forest of dean which needs updating. The kitchen and bathroom are gross -_- and need total replacement. The flooring in all rooms also needs changing.

I do believe the price of the property may reflect that. But how much would this (approximately) cost to ensure I do not offer too much for the house. Do I check prices for similar properties and minus the cost of fixing/updating or would I need to offer more?

No checks have (yet) been done on the boiler/electrics so we'd need to check that too.

 

Thanks

:D

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  • 3 months later...

Kaz hi

 

The days of putting in low offers on repossessed properties and having them accepted by the bank/lender are long gone for the most part.  Agents who sell repossessed properties work to strict criteria from the lender and are looking to achieve very near to the price being asked so there is usually very little negotiation room and you will be expected to complete in a short timescale and provide proof that you can achieve this - ie either the cash in the bank or an Agreement in Principle (AIP) from another lender.  The agent will have normally had to compete for a market valuation and tender for the business and they will be making little out of the sale so their involvement is likely to be minimal if they can help it.  

 

What you will need to do is to look at a buying figure close to the asking price, calculate how much it will cost to refurb and do some research on its likely post refurb value and then see if the figures stack up.  It is worth remembering that if a property has been repossessed the homeowner will have been in financial problems for an extended period of time as repossession is a last ditch action by the bank.  If the homeowner is in financial crisis there will have been little or nothing spent on the property for the same time period and everything will have been neglected so expect heating and electricals to need surveying and servicing - at the very least.  If you think the repo was likely to have been acrimonious then the repossessed sometimes think they are scoring over their bank by creating hidden damage - eg piercing pipework or damaging electrics that are unseen and only discovered when you start refurb work.  So best advice is to revisit and go through the house with a sceptical and cautious eye - better still take a builder friend who is not likely to bid themselves!

 

It is also worth remembering that the property is "sold as seen" so you will have no come back on the bank for discovered damage after purchase.

 

This sounds gloomy but in reality wanton damage is a rare occurrence but something to be mindful of and also a repo is often a good way of making quick capital gain - if you are new to the business you may need to be more cautious.  It is also worth remebering that if the property has been on the market more than a few days then the professional local investors will have already seen it and discarded making an offer for whatever reason and the agent maybe trying to coax a newbie investor to buy it with all sorts of snake oil salesmanship.  If the property has been on a month register your interest with the agent by making an offer you are realistic about and then when it is refused tell them to call you back if the lender reduces the price to your level but DO Not get suckered into going above what you think is the market rate for you.  There will be other properties always but I have seen too many end up with negative equity because they listened to an agents weasel words - they are paid to sell the property and don't care about your welfare however nice and persuasive they sound

 

Good luck

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Beware you can lose any money you spend on solicitors as well, i have pretty much given up looking at repossessions or company sales as they prefer to call them nowadays, after being gazumped a few times for not so much more than agreed i dont see them as a good buy generally.

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