Hi Everyone
I don’t usually post but Phil Stewardson said that it would be a idea good to share our experience of purchasing a repossessed property through an estate agent.
The thread was going to be called "How to buy a repo property" but as you will see I had to change the title.

The property was origionally up for £90,000
Instructions for purchase from seller were to have searches etc competed by 29/9/12 and completion no later than 7 days after the 29th of Sept.

31/8/12
Offer of 78,000 put in on property and accepted.
Mortgage quote received.
Sorted out local solicitor.

Monday 3/9/12
Changed solicitor to Ramsdens
Mortgage aip (Agreed in principle)

Friday7/9/12
Other offers have gone in
New offer put in by us of £80500 which was £500 below our max
Mortgage revised to new offer

Monday 10/9/2012
Paid solicitor for searches

Wednesday 12/9/12
Received new mortgage offer dated 10/9/12
Phoned solicitor spoke to assistant and searches in progression

Friday 14/9/12
Phoned solicitor and spoke to her about the searches progression. She reported back that they had all been done except the drainage search.


Monday 17/9/12
Phoned solicitor @ 9.00am about an update on the searches and she’s still waiting for the drainage search to come back.

Solicitor phoned at 11.ooam to tell me that the drainage search had come back and that she would be sending out the reports to us to read through.
Once read we need to sign contract and return with 10% deposit
Once that’s received should be ready to exchange.

Tuesday 18/9/12
Received the contracts today which need to be read signed and sent back.
The only problem is the solicitor will not proceed until they receive the forms from the welcome pack but unfortunately these were never sent. I am waiting an email from the solicitors so I can print out the necessary documents to send back to them.

Wednesday 19/9/12
Phoned Solicitor at 3.00pm, Emma not in but spoke to associate to let her know that the forms were being completed and that we were waiting for the structural survey to be done on the property.

Received call from Steve at 4.10 to tell me that the surveyor had looked at property and that it was bad news (depending how you look at it).

1) Lintels needed around the ground floor windows

2) Back of house needs lower bricks replacing and damp proofing membrane installing

3) Kitchen floor needs excavating and replacing

4) Dividing wall between kitchen and living room has damp

5) Roof tiles are too heavy for roof and causing it to spread, so a collar and support are needed.

6) In the kitchen where the wall has been removed a RSJ is needed. This is causing cracks in the bathroom, the door has dropped in bedroom and the upstairs is bowing.

Phoned Acres estate agents to talk to Lisa about trying to get a price reduction on the property due to the new findings, but she was out of the office

Phoned solicitors at 16.25 and left message for her to contact me.


Thursday 20/9/12
Ramsdens solicitors called this morning and we discussed the probability of us having to pull out of deal. Told them I would call back once I knew if the seller was going to drop the price. If the seller was not prepared to move on price we were pulling out of the deal.

Phoned acres estate agents this morning and this afternoon as they were going to contact seller to see if they were willing to drop the price because of the amount of work that needs doing.

Friday 21/9/12
Went away for the night with business partner Steve and the girls and decided with the extra costs now involved with purchasing and refurbing the property it was no longer a viable option. Phoned estate agent and solicitor to withdraw our offer. A good lesson was learned!!!

Money lost in deal was searches and survey.
Hours were lost researching and putting deal together.
Update Wednesday 26/9/12
Had estate agent call at about 13.45 telling us that the property had been offered to the buyer who was bidding against us before. They had put reduced offer in so I told her that id speak to Steve and get back to her. After ringing Steve, who was asleep after coming of a night shift, about 15 times I couldn’t get hold of him so put an offer of £75,500.
Offer was accepted but I was told that they would have to go back to the other buyer.
Needed to get hold of Steve to agree the max price so called him another 15 times and then at about 16.30 managed to get hold of him and we agreed a price of £76,500.
On cue Estate agent called at 16.45 and I gave her our final Offer. She also told us that the other buyers said that the last offer was their final offer.
Looks as if we’ve sorted it this time around.

27/9/12
Got a phone call at 15.00 from estate agent to tell us that those other bloody buyers had put another offer in that was above ours. I said that our last offer was our final offer and told the estate agent that the other buyers were going to be in for a shock to which she agreed.

I think that’s the end of it.

28/9/12
Time to start all over again
Arranged 3 viewings for Saturday.

Del and Ste

Thank you for sharing such a frustrating experience.

Those who are philosophical would say, it all happened for a reason and that there's a better deal around the corner, which is what you are already planning to find so you are ahead of them already. Of course, this doesn't stop it being annoying but it does help you to understand that you've learnt so much during the journey.

An observation, some might make is surrounding whether you could actually get the work done that you described as needing doing for the difference between your first and last offer? Had you allowed your hearts to start making decisions, rather than the spreadsheet, which is always a dangerous thing?

Good luck with your ongoing search for opportunities and I sincerely believe you next one will be a wowzer as you've earned it!

Cheers Micheal
We were frustrated and got carried away. The figures still stacked but we would not of had a pot to p*** in. We were more scared about the unknown problems and the fact if any other expenses would of occured we would have been in the poo.

So it really does sound like you have saved yourself some pain and learnt loads, some might say you've been quite successful, even if it doesn't feel that way.

Good luck with your hunt for the next one, it's just around the corner, which corner is all you need to figure out.

(29-09-2012 04:11 PM)delroy_smith Wrote:  Hi Everyone
I don’t usually post but Phil Stewardson said that it would be a idea good to share our experience of purchasing a repossessed property through an estate agent.
The thread was going to be called "How to buy a repo property" but as you will see I had to change the title.

The property was origionally up for £90,000
Instructions for purchase from seller were to have searches etc competed by 29/9/12 and completion no later than 7 days after the 29th of Sept.

31/8/12
Offer of 78,000 put in on property and accepted.
Mortgage quote received.
Sorted out local solicitor.

Monday 3/9/12
Changed solicitor to Ramsdens
Mortgage aip (Agreed in principle)

Friday7/9/12
Other offers have gone in
New offer put in by us of £80500 which was £500 below our max
Mortgage revised to new offer

Monday 10/9/2012
Paid solicitor for searches

Wednesday 12/9/12
Received new mortgage offer dated 10/9/12
Phoned solicitor spoke to assistant and searches in progression

Friday 14/9/12
Phoned solicitor and spoke to her about the searches progression. She reported back that they had all been done except the drainage search.


Monday 17/9/12
Phoned solicitor @ 9.00am about an update on the searches and she’s still waiting for the drainage search to come back.

Solicitor phoned at 11.ooam to tell me that the drainage search had come back and that she would be sending out the reports to us to read through.
Once read we need to sign contract and return with 10% deposit
Once that’s received should be ready to exchange.

Tuesday 18/9/12
Received the contracts today which need to be read signed and sent back.
The only problem is the solicitor will not proceed until they receive the forms from the welcome pack but unfortunately these were never sent. I am waiting an email from the solicitors so I can print out the necessary documents to send back to them.

Wednesday 19/9/12
Phoned Solicitor at 3.00pm, Emma not in but spoke to associate to let her know that the forms were being completed and that we were waiting for the structural survey to be done on the property.

Received call from Steve at 4.10 to tell me that the surveyor had looked at property and that it was bad news (depending how you look at it).

1) Lintels needed around the ground floor windows

2) Back of house needs lower bricks replacing and damp proofing membrane installing

3) Kitchen floor needs excavating and replacing

4) Dividing wall between kitchen and living room has damp

5) Roof tiles are too heavy for roof and causing it to spread, so a collar and support are needed.

6) In the kitchen where the wall has been removed a RSJ is needed. This is causing cracks in the bathroom, the door has dropped in bedroom and the upstairs is bowing.

Phoned Acres estate agents to talk to Lisa about trying to get a price reduction on the property due to the new findings, but she was out of the office

Phoned solicitors at 16.25 and left message for her to contact me.


Thursday 20/9/12
Ramsdens solicitors called this morning and we discussed the probability of us having to pull out of deal. Told them I would call back once I knew if the seller was going to drop the price. If the seller was not prepared to move on price we were pulling out of the deal.

Phoned acres estate agents this morning and this afternoon as they were going to contact seller to see if they were willing to drop the price because of the amount of work that needs doing.

Friday 21/9/12
Went away for the night with business partner Steve and the girls and decided with the extra costs now involved with purchasing and refurbing the property it was no longer a viable option. Phoned estate agent and solicitor to withdraw our offer. A good lesson was learned!!!

Money lost in deal was searches and survey.
Hours were lost researching and putting deal together.
Update Wednesday 26/9/12
Had estate agent call at about 13.45 telling us that the property had been offered to the buyer who was bidding against us before. They had put reduced offer in so I told her that id speak to Steve and get back to her. After ringing Steve, who was asleep after coming of a night shift, about 15 times I couldn’t get hold of him so put an offer of £75,500.
Offer was accepted but I was told that they would have to go back to the other buyer.
Needed to get hold of Steve to agree the max price so called him another 15 times and then at about 16.30 managed to get hold of him and we agreed a price of £76,500.
On cue Estate agent called at 16.45 and I gave her our final Offer. She also told us that the other buyers said that the last offer was their final offer.
Looks as if we’ve sorted it this time around.

27/9/12
Got a phone call at 15.00 from estate agent to tell us that those other bloody buyers had put another offer in that was above ours. I said that our last offer was our final offer and told the estate agent that the other buyers were going to be in for a shock to which she agreed.

I think that’s the end of it.

28/9/12
Time to start all over again
Arranged 3 viewings for Saturday.

Del and Ste

I'm a) suprised you missed all of the problems from your own visual inspection, b) suprised your mortgage val wasn't a problem with having all these issues, and c) suprised your agent put forwards offers based on it being mortgaged.

Having said that I went for a repo last year. Decent house but loads of damp issues.

Got out bid, and the opposite buyer ended up reducing their offer on the back of their valuation. As I was planning on a cash purchase I was a little pissed off!

Simon,
You have to pay for a mortgage valuation in order to secure a mortgage offer but this should not be confused with a survey. The mortgage valuation merely confirms to the lender that the property is worth at least what it is lending you – it is not its responsibility to point out any repairs that need doing.

(29-09-2012 10:31 PM)delroy_smith Wrote:  Simon,
You have to pay for a mortgage valuation in order to secure a mortgage offer but this should not be confused with a survey. The mortgage valuation merely confirms to the lender that the property is worth at least what it is lending you – it is not its responsibility to point out any repairs that need doing.

I am aware of that. However a mortgage valuation would/should also have picked
up the more obvious defects.

kissing frogs Delroy

The principle that you have to kiss an awful lot of frogs before one turns into a prince

The other old saying is that you make your money on a property when you buy it as opposed to when you sell it

You have to make an awful of of offers, expect almost all of them to be rejected and the few that get accepted should each be a peach

Offer aggressively at prices that, if accepted, make a handsome margin for you. Walk away when you get outbid, safe in the knowledge that whoever buys it has over bid and they wont make as much as they think out of it

You may find it useful to build a relationship with someone with enough building knowledge that can spot all the stuff you missed so, when you make your offer, you make it accompanied by a detailed list of the properties faults and a reasoned argument for your derisory offer.

You may wish to consider using bridging, rather than mortgages, when purchasing these types of deals. It may be more costly but
1. you will never worry about not getting the funding due to faults with the property
2. you know you will be able to offer to complete much quicker than by ever using a mortgage
3. you can make more aggressive offers, as bridging effectively turns you into a 'cash' buyer, in terms of the speed that you can complete
4. by using a bridger that values against OMV, rather than purchase price, you may end up having to put less of your own cash into the deal to complete

Kevin Wright
07889 526979
kevinwright@thinkpositive.co.uk

Thanks for sharing your experience Del.

I know how frustrating it must be, but if you learn from it, there is only "win and learn".

Just 24 hours ago I posted Property transactions don't always go as planned , with my own real life example, so it's very timely to hear another one.

I think it's really valuable for the property community to hear real life practical stories, not theory, as this gives a much clearer picture of how it is to be involved in property at the coal face.

Thanks again for sharing Del and good luck with your next one!

Hi Del,

Many of us have been in similar situations. Quite a while I go, I posted a thread on How Not To Invest in Property, so you are definitely not alone in things not going to plan. It may be a bumpy road but stick with it and you'll get there in the end.

Best of luck with future ventures! As someone said earlier in the thread, you might need to kiss a few frongs along the way

J.