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Well, it was going to be the only way I could afford a house really, and one's come up that is the right size and location.. but it's been repossessed. How much of a nightmare is that, and what sorts of things should I be looking out for? First time buyer so completely clueless.
Thanks in advance!
Same as any other house mate. The only difference with a repo is that it's being sold by the bank, rather than the original owner. There's no reason why a repo should be cheaper than any other house in similar condition- it's just that when they don't sell through estate agents in the normal way they're sold at an auction, at which they should fetch their true market value- which in a falling market is likely to be lower than the asking price from an estate agent:).
Edit: anyway don't buy a house now. Prices still have a LONG way to fall:).
One of the things to bear in mind with a repo house is that the bank will generally isolate the gas / electrics / water meaning that you can't test any of it before you buy so you won't be able to test taps, central heating, hot water, even if the lights work. They will generally also not let you turn them back on until you buy citing some health & safety BS i.e. they can't guarantee your safety / not insured etc. So it would pay to get a proper survey done rather than the "valuation" that most mortgage companies go for, this will include them checking this sort of thing, it means paying extra (around £800) but it's worth it in the long run.
Also this is one of the reasons why a repo house is cheaper.
Another thing to remember is to not think that just because it is owned by a bank that you cannot barter on the price, go in low, in fact at the moment go in real low, depending on how long the house has been on their books the may just be looking to ditch it ASAP. An unoccupied house in a falling market costs the bank money every day it is unoccupied.
To counter rave's view it turns out one of my neighbours sold his flat, we live in a small block of 7, and he has sold it for a profit(4%) in the last 18 months. All he did to the place was paint it!
The trick is to buy something that isn't 'trendy'. People buy into bubbles really easily, places like docklands are really feeling this, east london is cheap because its a crime ridden, vomit on street sh!t hole. Prices there have fallen, a lot lately, yet you've got places where they've been practically flat on the opposite side.
The main question is are you happy to live there for the next 20 years? Mabye you might need a bigger place, but would you be happy with the location?
Just like others have said, it's no different to buying any other house.
I did the same thing, buying a repossession, when I bought my first house. Only difference in my case was that the house had been repossessed, broken into by squatters, re-repossessed (apparently the next door neighbours got a bit fed up and knew someone with some rather fierce dogs...) and then boarded up! I only had a basic survey done, as there was no gas/water/electricity at all, so nothing to check there!
Steve
The main thing to remember is that a reposessed house is sold by a company and not a private owner. This means that the property is 'Sold As Seen' and that they won't be able to tell you if any extension work had building permission or if the gas/electric etc. was fitted by registered workers.
You inherit responsibility for any problems with those areas so make sure you get it checked out first. A decent survey and the usual compulsary searches that get done should highlight any major problems though. On the plus side, a reposessed home means that there's no upward chain so the sale should be fairly straightforward with fewer delays.
Personally I'd be looking out for the people who have been evicted - looking to give the new owner a good kicking when they move in.Quote:
Originally Posted by kalniel
Aren't there black marks against the property if its been repossessed? CCJ's or something? Might be harder to get a loan or something if you apply.
That's a Common misconception. The credit scoring system goes against a Person not the property.Quote:
Originally Posted by Stringent
Maybe, but we did offer to buy it from the owner before they were repossessed...Quote:
Originally Posted by IBM
it is SUPPOSED to only be the person, but when the credit system gets it wrong, which it does a fair bit.. it's a NIGHTMARE to sort out.Quote:
Originally Posted by alsenior
Buy with extreme caution... and very cheaply.
Also: many repo houses have major structural/electrical damage to them. This is often deliberate, by the owners who realised they were giving it back and losing everything. Things I have personally come across are:
removed roof beams.. I have no idea why they took them out.. but the roof had less than half of the correct roof beams in. No one checks on this when auctioning.
damaged pipes, with potentially huge leaks ready to occur and rupture water everywhere
misswired/deliberately short circuited electricals, causing potential fire hazards and other dangers
Of course ALL of this is relevant to the nice person/nutter who moved out. In theory, the person losing their house would want it to sell for the MOST money possible to reduce the mortgage shortfall. That isn't how everyone's brain works. See Mike's post above)
I dont even know if an auctions house needs a HIP or not.
Well we had a look. Place has been deliberately trashed. It's probably still a bargain, but doesn't have a good vibe.
Yikes. Modern mentality of 'well, if I can't have it, no one can...' :(
What I\'d suggest is looking at what you think would need doing to fix it, add at least 50% for hidden costs and then subtract that from what you think the house is worth to you.
Oh, and if you aren\'t comfortable, run.
I'd be even more careful TBH. Assume that everything you can't prove is OK is screwed. Then double the cost of that. Take that off the price you were willing to pay. Pay no mare than that.Quote:
Originally Posted by dave87
Remember when you buy an auction property, they should be a lot cheaper than buying a house normally partly because you are taking more risks.
Also remember it's a buyers market. Another equally good or even better bargain WILL turn up :)