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pmccormick

Repossession Truths

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Hi,

I'm engaged in a sale for a repossession flat, I'm currently the highest bidder, I know I can still get sacked at the last moment in these things. I'm just arranging the solicitor now to get certain procedures moving and in place, when I got some advice from a friend (mortgage broker).

The rules around 'flipping' a repossession have changed. EXAMPLE:

I buy the repossession property at £90,000, current market value is £144,000.

Spend a little money renovating the place and get it ready for sale.

However, bank valuations on properties for new mortgages are checking the land registry to confirm the previous purchase price, and using this at the NEW market value. Which in my example means the property would have a value of £90,000 and any lender will not give the asking price mortgage unless the new buyer has the cash difference.

Can anyone confirm that this is the truth?

Thanks,

Paul

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Funny, isn't it. Why isn't the person you could sell to prepared to pay 92k for that place worth 144k. THats the problem the bank faces and thats the worth the property would be worth 90k if you buy it.

Hi,

I'm engaged in a sale for a repossession flat, I'm currently the highest bidder, I know I can still get sacked at the last moment in these things. I'm just arranging the solicitor now to get certain procedures moving and in place, when I got some advice from a friend (mortgage broker).

The rules around 'flipping' a repossession have changed. EXAMPLE:

I buy the repossession property at £90,000, current market value is £144,000.

Spend a little money renovating the place and get it ready for sale.

However, bank valuations on properties for new mortgages are checking the land registry to confirm the previous purchase price, and using this at the NEW market value. Which in my example means the property would have a value of £90,000 and any lender will not give the asking price mortgage unless the new buyer has the cash difference.

Can anyone confirm that this is the truth?

Thanks,

Paul

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eh?

The bank has repossessed the property and looking for a quick sale, not through an auction. The repossession price is £90k, but I had the property estimated from estate agents, zoopla and reviewing the previous sale prices for the same flats in the block at a average of £144,000.

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The bank has repossessed the property and looking for a quick sale,

and why do you think that is?

(considering it is illegal not to try and get the best price for the given condition, then logically they are only legally allowed to go for a quick sale because if they go for a slow sale they will get a lower price)

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The repossession price is £90k

what is a reposession price when it's at home?

Edited by Si1

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The bank has repossessed the property and looking for a quick sale, not through an auction. The repossession price is £90k, but I had the property estimated from estate agents, zoopla and reviewing the previous sale prices for the same flats in the block at a average of £144,000.

Maybe I'm not understanding.

The bank is forced to offload, and you're gambling on zoopla's estimate based on an expectation that a similar bank will fund the offloaded property at a 50% premium?

Surely the quick sale is the market setter. If you want to speculate, there are many more attractive markets at the touch of a button.

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The property is worth what somone is willing (and able) to pay. In this case its 90K. You do however have to ask your self if it is really worth 90K given that your bid is based on being able to resell for a 50% premium. Assuming you could not sell for any premium in the near to mid term (5-10) years, is it still worth 90K to you?

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Does an auction take a long time?

You rarely the "best" price at an auction as you almost never find that "mug" who's prepared to over pay.

tim

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The bank has repossessed the property and looking for a quick sale, not through an auction. The repossession price is £90k, but I had the property estimated from estate agents, zoopla and reviewing the previous sale prices for the same flats in the block at a average of £144,000.

Revisit what you have said and look at each point slightly differently

The repossession price is £90k - This means its actually worth 90k otherwise people would be offering more

I had the property estimated from estate agents - The means the price was "estimated" by a bunch of idiots who know nothing about property other than how to collect fees

zoopla - really.. no comment needed

reviewing the previous sale prices for the same flats in the block - comparing the price of flats sold during peak (it is NOW not peak)

So my conclusion, if you get it for 90k then its maybe worth 100k as i guarantee you there is still some sharp money out there sniffing around and if it was worth 140k you would already be outbid

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zoopla - really.. no comment needed

Help! I mentioned zoopla to an over-indebted relative, and now he thinks his property bought in 2003 for £330k (previous sale price £185k in 2001) is worth £500k.

Any links to debunk zoopla?

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Not for a repo, many are sold with the caveat that completion must take place within 28 days.

That's the standard time for completing an auction purchase. With a repossession completion can be as short as 14 days

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Help! I mentioned zoopla to an over-indebted relative, and now he thinks his property bought in 2003 for £330k (previous sale price £185k in 2001) is worth £500k.

Any links to debunk zoopla?

If it's in a "good" London location it will be.

You need to look at the LR stats for your area.

Whatever the posters on this board may think, prices paid (and hence "value") have NOT fallen back to (or below) 2003 levels. The rest of the market (in most cases) is still prepared to pay 2006 prices.

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Who at the bank actually makes the decision on what price to accept for a repossessed property?

We saw a house on at £120K, surrounded by identical houses at same price, all reduced in the last few months and none selling. So we offered £105K, together with evidence of our ability to biu as cash purchasers. EA came back same day to say "they" (the bank, presumably) had turned down our offer. So we offered £108K. Not hearing anything back, we called the EA few days later and she said the bank was "taking it to the board" or something.

So is there a specific procedure within the bank for deciding whether or not to accept an offer? Is there a particular person who deals with these repos, and what is their job title? I'd like to understand the mechanism better, especially as we upped our offer on Friday - the day the media was full of "Worse than the 1930's depression" news, and some UK banks were being downgraded . . .would that influence their decision?

Last question: I have a personal story of greed and stupidity, overpricing a probate-sale house which then went for £100K less, which will be of encouragement to embittered buyers everywhere, which thread should I put it on?

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Who at the bank actually makes the decision on what price to accept for a repossessed property?

We saw a house on at £120K, surrounded by identical houses at same price, all reduced in the last few months and none selling. So we offered £105K, together with evidence of our ability to biu as cash purchasers. EA came back same day to say "they" (the bank, presumably) had turned down our offer. So we offered £108K. Not hearing anything back, we called the EA few days later and she said the bank was "taking it to the board" or something.

So is there a specific procedure within the bank for deciding whether or not to accept an offer? Is there a particular person who deals with these repos, and what is their job title? I'd like to understand the mechanism better, especially as we upped our offer on Friday - the day the media was full of "Worse than the 1930's depression" news, and some UK banks were being downgraded . . .would that influence their decision?

Last question: I have a personal story of greed and stupidity, overpricing a probate-sale house which then went for £100K less, which will be of encouragement to embittered buyers everywhere, which thread should I put it on?

My understanding is that the bank will look to receive the sum that is owed by the previous owner.

If it is advertised by the EA, they are legally obliged to obtain the 'best possible price' for the vendor and are required to advertise any offers for 7 days (if it's outside of auction).

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........................Last question: I have a personal story of greed and stupidity, overpricing a probate-sale house which then went for £100K less, which will be of encouragement to embittered buyers everywhere, which thread should I put it on?

"Anecdotals" probably best - I look forward to hearing it

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  • 338 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
      • up 2.5%
      • up 5%



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