97TURBO

Looking for some advise regarding a repossession. The house is on at around 30k below the going rate in this area, the home report looks sound. We cant test the services as all cut off. Otherwise everything looks fine. Is there anything i should worry about?

CADpaul

Nope, just go for it, they normally want to complete ASAP
You'll find a few niggles normally, but my purchase has needed about 5k spent on it, but it's still a massive bargain

hodgy0_2

I bought one years ago, (1996) the previous owner took all the radiators and the kitchen sink

We had to replace them before we actually got a mortgage - but it was a brilliant buy

Paid 67k, it is now worth about 700k, shame we didn't hang on to it a bit longer

Dingdongler

Nothing to worry about. The most important thing is to get your feet under the table, you can always reduce your offer after the survey if you have concerns.

You need to sell yourself as being the best buyer so attach proof of funding and details of your solicitors with your offer letter.

Good luck with the purchase. If you come across any other deal like that let me know and I'll pay you an introduction fee

mamoon2

I've bought two. Nothing to worry about.

97TURBO

Thanks for the response, feeling confident about going ahead now. I'll speak to our IFA on monday. The one thing i never mentioned is i will need to mortgage as we dont have anywhere near enough to buy outright.

hodgy0_2

Personally I would not haggle to much, especially if is 30k below the market, and doubly so if you have to raise finance

If you get too "cute", they (the bank/building society) will sell to someone who isn't - IMO

mamoon2

Haggle as much as you want. The bank will either say yes or no. Presuming you aren't in London it's not a fight on who gets them.

I bought a property which sold in 2008 for £211,000 in 2011 for £105,000. It was advertised at £140,000.

Pay what you think it's worth and haggle as much as you want. Banks don't give a ****

hodgy0_2

Ah sorry i did not realise the OP was the only one in the world that knows that this property is being offered/sold at 30k below the market

I have usually been in operating in a fairly open market - and there was always the possibility of someone else making the Banks life easier by simply buying it

Not fvcking around trying to get an even better deal - imo

Dingdongler

I think this probably reflects the difference between the London market and elsewhere around the country. Especially so in the last eighteen months where there are at least ten people chasing each property with open days, sale by tender etc.

Things are so mental at the moment that Estate Agents are charging £100 just to register as a buyer on their books. They then charge the buyer 1% + vat as a finders fee.

As I said before, if somebody can find me a London property £30k under market value I'll give them £5k as a finders fee

hodgy0_2

And a big difference between buying a home and buying for investment/profit

A totally Different game, so too are "rules" / priorities that apply

By all means haggle away and try and get another 5, 10k off - and all the while, presumably , it is still on the market

Ready for other people to buy it - and snap up a bargain (not easy in this market) and any trader will tell you "you make your money on the buy price"

But like I said if it is so off the radar that no one else is involved - then haggle away

97TURBO

Its very much on the radar and also would be our home, for these reasons we wont take the chance of further haggeling. Probably have an offer in wed/thurs at latest.

mamoon2

Yeah, don't put a lower offer in!.... some bloke on Scoobynet knows it all and saying you'll lose it.

Ignore Hodgy, he's talking utter b0llocks. All repossessions have to be advertised before sale anyway. So if your offer is accepted, a notice will go in the paper and online saying "an offer of £xxx,xxx has been accepted, any further offers should be made by X/X/2014.

Haggle away my friend!.... You can always increase your offer if another bid comes in.

Devildog

Not quite

I think 97 Turbo is buying a house in Scotland (he mentioned a home report) in which case the property will have been subject to an advertsing and marketing campaign already as required by law (being a reposession).

If there is reasonable interest, and the property is advertised on an "offers over" basis, an offer may result in the agent setting a closing date for offers which effectively becomes a sealed bid auction.

If there has not been much interest, or the property is on at a fixed price, there may be some scope to haggle, but if the price offered meets the fixed price, subject to the offer terms being sensible, there would be no further advertising and the purchaser would normally be assured of getting the property at that price, provided the sale progresses normally.

My other half bought our property as a reposession 3 years ago. the entire kitchen, light fittings, switches, door handles had all been removed. Its probably worth at least 60% more now than what she paid and spent doing it up. I'd buy a repo without hesitation.

mamoon2

Is it Scotland?

Anyhow, i've bought two repossessions in the past few years and have offered lower amounts (haggled if you like) and they still always have to make public the offer for a certain amount of time before the sale proceeds.

With regards to yours having no kitchen etc... I bought one without a Kitchen, I had to put a sink in to make it mortgageable

97TURBO

Hi guys, yeah its Scotland, sorry i should have said.
Found out today that its already been advertised etc, so now at the point of looking for offers. However, whats really frustrating is the agent advised me that by making an offer I will effectively trigger a closing date.
The client want that scenario, unless i get really lucky and they dont get much more serious interest. Also, they have set a 7 day period from going to market before they will listen to any offers, so friday is the earliest we can make a move.

97TURBO

so does that mean other potential buyers can see what my initial offer is? (is scotland not different)

Petem95

I bought a repossession last year and it was over £100k less than what the previous owner had paid, but I did have some issues.

Try and get a decent solicitor who will complete asap. I had other people trying to buy it whilst the sale was going through, so this made it quite a stressful process.

The other issue I had is all the water system had been drained completely, but when I finally got the keys and went to turn on the water and electric etc I noticed the drainage value on the boiler had sheered off when it had been drained, so they'd disconnected a pipe behind the boiler and drained it from that. As you can't repair the cylinders it was looking like I'd had to fork out £1700 for a new boiler and had no hot water for a week during freezing weather. Managed to get it sorted in the end for under £100, but it was a ball ache - worth checking that sort of thing - not something that would necessarily stop you buying, but worth preparing for if you saw a potential issue.

Dingdongler

An agent just wants the sale through asap so that he gets his commission. He doesn't want a sale to fall through or take too long because you can't get funding, are disorganised or change your mind.

Making the right offer is just half the job, you need to impress upon him that you will make this happen quickly. An agent would rather sell to somebody for £5k less who will crack on quickly. After all the office will only get 1% of that £5k (ie £50)

Hence as I mentioned before, with your offer letter make sure you attach proof of funding, solicitors details etc. Look as though you know what you are doing.

Best of luck.

mamoon2

Good advice, make sure you let them know you can complete fast and funding is approved (i hope you are pre-approved?)

Devildog

Ding, in Scotland the offer will come from a solicitor anyway, unless its verbal. Agreed that having POF is key. A lender in posession will want to see that.

Devildog

Ignore mamoon2. He's also talking utter b0llocks (although in fairness he doesnt understand the Scottish system)

Yes, its different here. They shouldn't know what your initial offer is, but an unscrupulous agent may let it slip.

What Ding says makes sense, but its not just about the % for an agent who is selling - with repo's there's a greater lender relationship and more ar stake than just one sale.

Question for you - are you buying from a lender who has reposessed or from an Insolvency Practitioner who is acting as Trustee in Bankruptcy/Liquidator/Administrator?

And is the selling agent Aberdein Considine?

97TURBO

"corporate firm" was the term used and its a local agent doing the sale.

hodgy0_2

in the scottish system, is there an "asking price"

Dingdongler

Thanks DD.

I'd genuinely appreciate it if you could explain exactly how the process works.

Is this your line of work btw?

Devildog

That's an interesting turn of phrase.

Corporate firm and local agent *suggest* that this might be a sale following an insolvency. Which, if correct, means the seller is, effectively, the Insolvency Practitioner and you won't get all the warranties you would normally expect when buying a house - although with a repo from a lender you wouldn't get them all anyway so its no big deal.

Ask the agent who the seller is. Specifically who the seller is - you'll find out anyway when you enter into missives, so there is no reason for the agent not to say. He's probably not saying at this point for fear of putting you off the purchase.

If you can find out who is selling let me know - I might know them

Devildog

Yes - Generally either on a "fixed price" or "offers over" basis, although I have seen "offers in the region of" from time to time.

Its pretty flexible up here how you adveritise.

I've personally sold on both offers over and fixed price basis

Devildog

I'm in the insolvency and recovery profession Ding. Mostly corporate, but some personal work. I've sold a lot of property over the years, both commercial and residential.

In simple terms selling a house in Scotland involves putting it on the market at either "offers over" (generally at a lower price than expected to stimulate interest) or a fixed price which is usually set at what could be expected to be achieved, or a little bit lower to achieve a quicker sale.

It is much less common in Scotland to offer below the "offers over" price as this is already set low with the expectation of achieving more. Its possible to offer below a "fixed price" selling price and be successful but less so (historically at least) than in England. In the grand scheme of things, "fixed price" sales are relatively new and have only really become more common in the last 10 to 15 years.

As a purchaser its common to have your solicitor submit a note of interest (although a legal offer can be submitted at any time) and if two or more notes/offers or a combination are submitted then the selling agent will gernerally set a closing date for final offers. This is a sealed bid process.

The advantage of advertising at a fixed price is that prospective purchasers know what they will have to pay and don't have to get involved in a bidding war, often to be dissapointed. It's very much a take it or leave it, known quantity. You might not ultimately achieve as high a price as a seller but its an easier process for all concerned.

Whatever the basis, once an offer is submitted, and accepted in principal, the seller and the buyer enter into "missives" via their respective solicitors. The "missives" are the process by which the terms and conditions of the contract of sale is agreed. The big difference in Scotland is that the purchaser's solicitor (if not both sides) will push to conclude the missives as soon as possible and often weeks if not months before the date of entry.

When the missives are concluded both parties are legally bound by their terms. As this happens in advance of the purchaser's date of entry, both parties have certainty on the sale in advance and "gazumping" is not a feature of Scottish property sales. Its much easier to coordinate chain sales as the danger that a purchaser won't pay on the day is massively reduced in Scotland.

Failure to complete by the purchaser or vacate by the seller generally leads to financial penalties.

Sales by lenders in posession or by trustees in bankruptcy, for example, are conducted by exactly the same process, although both have to evidence adequate market exposure to ensure the best price is achieved.

hodgy0_2

so what happens if the agents (acting on behalf of the bank) have an "asking price" which you agree to pay in writing

does that form the basis of a contract - or can they revise they then asking price

(in which case I would argue it was not an asking price, but a starting point for a bid process)

Devildog

If its a fixed price, then its an asking price. If its offers over, then its exactly that - an indication of the very least that will be considered.

Its highly unlikely that offering the fixed price in Scotland will not see a purchase at that price, provided that all the other conditions of the sale and purchase can be agreed, such as date of entry, proof of funding, what's included in the sale, what warranties are to be given, etc, etc.