Tuesday, December 02, 2008
ARE MORTGAGE LENDERS OVERPRICING REPOSSESSED PROPERTIES BEFORE THEY GO TO AUCTION ASKS DAVID LAWRENSON OF LETTING FOCUS
Mortgage lenders are seen as the robber barons of the day though at least the kindly old government (now majority owners) has forced RBS to go easier on seeking repossessions.
But there is another way that mortgage lenders may be letting down people - on the prices they seek for property they have already repossessed.
Let me explain.
A mortgage company is duty bound to get the best price for a property and by doing so they reduce the debt for the person who has been repossessed.
Now, the usual first place a lender tries to sell a repossessed property is through an estate agency. Typically a property will be put on with an agent for a couple of months at whatever price it was valued at by the lender’s valuers.
If it doesn’t sell through the agent then it will go to auction.
However, I have heard quite a few estate agents complain that lenders have refused to accept “low ball offers” only for the same property to go to auction a month or so later and sell for significantly less than was offered for it at the agency.
So, the person who was repossessed loses out because any debt he had will be bigger because the property fetched less than it could have done and interest was accruing for longer.
If you are a would-be property buyer or an estate agent who has seen this happen I’d like to hear from you.
Read our guide to Buying Property at Auction
ADD A COMMENT?
Feel free to add a comment. If you want to view previously added comments, you need to click on “Link to this Post” at the bottom right of this post and then scroll down to the end of the post.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of LettingFocus.com - the landlord and property letting advice experts.
I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property title - Buy Successful Property Letting - How to Make Money in Buy to Let.
The new edition is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing, capital gains taxes and it has new sections on sale and rent back.
I’m an expert freelance property writer, property speaker and I run this well known property letting and investment blog
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general property letting advice for anyone looking to buy property for themselves or to let out.
In my work as a consultant I help private individuals with any aspect of buying property or buy to let. What’s unique about lettingfocus.com is that we are independent property investment advisors because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from any of these sources.
We simply give one to one unbiased advice and are often asked to evaluate other property investments.
In my corporate consulting role I also advise banks, building societies, housing associations and web portals with their buy to let and property products and services.
You can read more of my blog & find details of my networking, advice and property training programme at my website.Copyright: David Lawrenson 2008. This blog is updated once a week.
WANT TO BE KEPT UPDATED WITH OUR LATEST BLOGS?
It’s easy.
If you are on the home page of our blog, go to the bottom of any post, and click on “LINK TO THIS POST” to bring up the page for a specific post, then hit END …and on the right you’ll see “Site feed.”
If you are already on a specific post page, just hit END and you will see the site feed.
You then just copy the link that comes up into your News Reader or News Aggregator. Even a non techie like me managed to do all this.
Please note if you have a website & are thinking of reproducing material here - that’s fine but we DO require the full links shown in each blog to be included, including also the links in this section. The full article including all links must be available to ALL VIEWERS of your site and not restricted to members.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
Please Contact Us button at our main site http://www.lettingfocus.com/ if you have any queries about this.
But there is another way that mortgage lenders may be letting down people - on the prices they seek for property they have already repossessed.
Let me explain.
A mortgage company is duty bound to get the best price for a property and by doing so they reduce the debt for the person who has been repossessed.
Now, the usual first place a lender tries to sell a repossessed property is through an estate agency. Typically a property will be put on with an agent for a couple of months at whatever price it was valued at by the lender’s valuers.
If it doesn’t sell through the agent then it will go to auction.
However, I have heard quite a few estate agents complain that lenders have refused to accept “low ball offers” only for the same property to go to auction a month or so later and sell for significantly less than was offered for it at the agency.
So, the person who was repossessed loses out because any debt he had will be bigger because the property fetched less than it could have done and interest was accruing for longer.
If you are a would-be property buyer or an estate agent who has seen this happen I’d like to hear from you.
Read our guide to Buying Property at Auction
ADD A COMMENT?
Feel free to add a comment. If you want to view previously added comments, you need to click on “Link to this Post” at the bottom right of this post and then scroll down to the end of the post.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of LettingFocus.com - the landlord and property letting advice experts.
I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property title - Buy Successful Property Letting - How to Make Money in Buy to Let.
The new edition is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing, capital gains taxes and it has new sections on sale and rent back.
I’m an expert freelance property writer, property speaker and I run this well known property letting and investment blog
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general property letting advice for anyone looking to buy property for themselves or to let out.
In my work as a consultant I help private individuals with any aspect of buying property or buy to let. What’s unique about lettingfocus.com is that we are independent property investment advisors because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from any of these sources.
We simply give one to one unbiased advice and are often asked to evaluate other property investments.
In my corporate consulting role I also advise banks, building societies, housing associations and web portals with their buy to let and property products and services.
You can read more of my blog & find details of my networking, advice and property training programme at my website.Copyright: David Lawrenson 2008. This blog is updated once a week.
WANT TO BE KEPT UPDATED WITH OUR LATEST BLOGS?
It’s easy.
If you are on the home page of our blog, go to the bottom of any post, and click on “LINK TO THIS POST” to bring up the page for a specific post, then hit END …and on the right you’ll see “Site feed.”
If you are already on a specific post page, just hit END and you will see the site feed.
You then just copy the link that comes up into your News Reader or News Aggregator. Even a non techie like me managed to do all this.
Please note if you have a website & are thinking of reproducing material here - that’s fine but we DO require the full links shown in each blog to be included, including also the links in this section. The full article including all links must be available to ALL VIEWERS of your site and not restricted to members.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
Please Contact Us button at our main site http://www.lettingfocus.com/ if you have any queries about this.
Labels: Auctions, mortgage finance and auctions, overpricing by lenders of reposessed property, property auctions, reposessions
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