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Mayalabeille

Ftb, Repossession House, Need Advice

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Hello guys,

I have quite a few questions regarding a property that we have seen and that we could be interested in and would appreciate your advice:

We are living in a very expensive part of South West England. Renting privately, both full employed with high average salaries.

We have been planning to look at buying a property before the end of 2011, we are locked in our rental contract until end of September but know the landlord and get on very well with him.

We have spotted a property in an area that we were considering for purchase at the end of the year. It is a repossession around abour 25/30% under what the other properties in the street went for over the last couple of year.

Needs some work but nothing major, as there is new double glazing and gas central heating. Things are in place so it is more or less carpeting, decoration and completly remodeling the garden which is a complete mess.

the house it itself really correspond to what we went, it is spacious and light.

We have only 10% deposit but if we were to purchase it we could find a mortgage that would cost us about 20% less monthly that what we pay currently on our rental (fixed for 5 years mortgage). We would borrow about 1.8 times our combine salary only!

The decoration part of it is a bit scary as first time buyers but we had a couple of quote and it seems doable with our left over saving.

Also what is scary is that if we were going ahead we would pay rent and mortgage for 4 months, it is completly doable with being skint for 4 months and I think we could find an agreement with my landlord as they really like us and are very understanding.

Here are my questions;

What the differences regarding buying a repossessed property/usual sale?

How long does it normally take? Does the lender selling the property normally try to rush things?

How much are normally solicitor fees and valuation fees?

There is a small extention at the back, I guess that because it is a repossession the lender selling will not have the planning permission papers, where can I get that?

Given the details I have just given, what do you think?

Thank you very much for your input and advice.

Maya

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What the differences regarding buying a repossessed property/usual sale?

No difference.

How long does it normally take? Does the lender selling the property normally try to rush things?

Expect a sale to take 8 weeks to complete. You can make this happen faster or slower by delaying, but don't delay it too much if the vendor starts to get impatient. With a repo, the lender usually wants a fast sale and usually only accept an offer if the buyer is in a position to complete quickly, but don't let that put you off. Once the offer is accepted and you have proven what position you are in, then they will be flexible due to not wanting to lose the sale.

How much are normally solicitor fees and valuation fees?

Ask around for the best price. After all they all do the same job. Expect to pay around £400 - 500, but that may be different in your area. Don't just jump for the first one you come across. A survey is about £100, but again depends on area and possibly the property.

There is a small extention at the back, I guess that because it is a repossession the lender selling will not have the planning permission papers, where can I get that?

There is no reason why the lender will not have all the paperwork. All the deeds etc. will have been handed back by the previous owners solicitor. If you do require them, then your solicitor will be able to get them from the local council at a price. Not sure how much due to each council being different. Say about £50.

Given the details I have just given, what do you think?

If you can afford to buy and can gain the mortgage, then you should buy providing you are in it for the long term. Why pay a landlords mortgage when you can pay your own and save money at the same time. Providing you are sensible with money and not secure debt against it or remortgage in several years when the value will probably start to rise, then you will benefit.

If you beleive your jobs are secure or if you were to lose them, would you be able to find work easily enough for a similar wage, then you have nothing to fear.

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Just to add.

If you make an offer which gets accepted the EA will need to advertise the offer probably in the local property newspaper to give a notice which could well find another buyer willing to pay more. If that happens use your head. Make sure you have a limit on what you will pay and don't get sucked in to a bidding war which could cost you a lot of money.

If it is a repo and being offered for a lot less than what anything else is selling for, then it will not be around by the end of the year.

How much below the asking price are you thinking of offering?

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We have been planning to look at buying a property before the end of 2011, we are locked in our rental contract until end of September but know the landlord and get on very well with him.

Also what is scary is that if we were going ahead we would pay rent and mortgage for 4 months, it is completly doable with being skint for 4 months and I think we could find an agreement with my landlord as they really like us and are very understanding.

If you do buy the house, speak to your land lord about advertising the flat early. Most decent landlords will let you out of a contract early if you can find a replacement tennant.

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If you do buy the house, speak to your land lord about advertising the flat early. Most decent landlords will let you out of a contract early if you can find a replacement tennant.

This is a point I was going to make, but forgot.

Good advice, but they may want to charge you the cost of finding a tenant especially if they are using an agent.

Alternatively let the landlord know the situation, so that it is not a surprise although I would wait until the offer is accepted. The landlord may accept 2 months notice because it gives them plenty of time to find a new tenant and make sure you do not hinder any attempts to tenant the property because if the landlord does not have a void, then everybody is happy.

I would offer them notice, but explain you are unable to give an exact date until the solicitors agree a completion date. Just tell the landlord it will be about 2 months.

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Thanks for all your advices.

regarding the landlord that what we had in mind: paying for to find someone else and at the same time obviously pay until he has someone else in the property so there is not gap for him.

Regarding the offer I had in mind that is another question: are repossession negociable as usual sale?

This is quite cheap for what it is so i would be confortable paying about 5% under the asking price but would offer about 10% under to start with. Do you think it is too high?

thanks

Maya

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You dont say whether the property is at auction or through a EA?

Who owns the property?

I've followed a number of properties at auctions.One example would be, A converted Barn, in a nice area, in Lincolnshire. [Valued at £350k at peak 2007 price.]

The house was a repossession, owned by a State Owned Bank, and I followed its progress as it went to auction on 4 seperate occasions over the course of a year.

Each time it received over ten bids. But never Attracted a higher bid than £110k.

At each of the 4 auctions, it did not meet the undisclosed reserve set by the bank. So each time it was withdrawn.

I found the last Estate Agent to represent the property. And called him.

The Estate Agent told me that the bank did not have to lower the reserve, as the taxpayer is bailing out the bank, therefore the reserve will be kept at stupidly high levels, until it is sold.

This occured over a year ago. And as far as I am aware the property is still sitting on the banks books.

The government complains about the "lack of housing" as a cause of the problem, yet they sit back and let the banks hold large amounts of the potential housing stock.

They should make it illegal for foreclosed housing to have a reserve price.

If house prices continue to fall as most believe they will, you could be facing negative equity. I would suggest waiting. Good luck.

[]And if any EA told me, 'you should buy now' I'd completely ignore him....]

Edited by Dan1

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Thanks for all your advices.

regarding the landlord that what we had in mind: paying for to find someone else and at the same time obviously pay until he has someone else in the property so there is not gap for him.

Regarding the offer I had in mind that is another question: are repossession negociable as usual sale?

This is quite cheap for what it is so i would be confortable paying about 5% under the asking price but would offer about 10% under to start with. Do you think it is too high?

thanks

Maya

I would need a lot more information. Have you looked at what the property previously sold for. You might be able to find more information on Zoopla using the 'home value' tool.

If it is with an EA, then offer much lower than 10% below asking price and see what response you get.

By the way, I'm an estate agent and I'm not telling you to buy. I'm advising you and by what you have said, I would suggest you seriously look at buying because of all the circumstances that you have mentioned. It all appears to make sound financial sense for you to buy.

Even if you buy and the value falls, so what providing you plan to own the house for a number of years. If your in it for the long term, then you will get your money back should you sell in the future or even make a profit.

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I would need a lot more information. Have you looked at what the property previously sold for. You might be able to find more information on Zoopla using the 'home value' tool.

If it is with an EA, then offer much lower than 10% below asking price and see what response you get.

By the way, I'm an estate agent and I'm not telling you to buy. I'm advising you and by what you have said, I would suggest you seriously look at buying because of all the circumstances that you have mentioned. It all appears to make sound financial sense for you to buy.

Even if you buy and the value falls, so what providing you plan to own the house for a number of years. If your in it for the long term, then you will get your money back should you sell in the future or even make a profit.

Thank you so much for all your advices i really appreciate.

The property is with an estate agent. They wanted to force me to see their financial advisor before organising a viewing (even if my bank already told me that we are all to go for a mortgage especially at this level). I have had a good chat and they understood that I was not going to be strongarmed into anything.

I cannot find any data on the house prices website so I don't know what it went for last time all I can see is that 2 in the same street went for over 25% more in 2009, and that their asking price seems to correspond to what was asked in that specific street in 2003/2004.

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Regards the extension you mentioned, Birmingham council have an on line search facility for all previous planning applications so maybe your council does to. At least then you know the structure is legal and allowed before proceeding and spending money finding out.

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Thank you so much for all your advices i really appreciate.

The property is with an estate agent. They wanted to force me to see their financial advisor before organising a viewing (even if my bank already told me that we are all to go for a mortgage especially at this level). I have had a good chat and they understood that I was not going to be strongarmed into anything.

I cannot find any data on the house prices website so I don't know what it went for last time all I can see is that 2 in the same street went for over 25% more in 2009, and that their asking price seems to correspond to what was asked in that specific street in 2003/2004.

Avoid seeing their financial advisor if you can - they want to find out how much you can afford to weaken you bargaining position (as well as trying to sell you a mortgage.) It is effectively walking up to the seller and saying "here are all my personal financial details and the contents of my bank account."

The appropriate phrase is "you can sell me a house or you can sell me a mortgage, but not both." If you cave in and see their advisor, they know they have a weak sucker.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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