And boomers wonder why millennials are bitter towards them..
- Thread starter Scam
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The cases show the ability to sue for a sale at undervalue but, as I said, relatively low value houses sales are unlikely to reach the courts which make their decisions public. It's like you saying I can't sue someome for being hit by a truck because the only reported cases are for being hit by a car.
Repossessed properties sold at auction tend to be in a distressed state hence your BTL investor having to renovate. If they could buy and flip without doing anything that suggests the property was initially sold for less than it should have been.
Let's consider dowie who has a well looked after £200k house and a £180k mortgage. Unfortunately dowie gets into a bit of financial bother and his house is repossessed.
Scenario 1 - The mortgagee fully markets the property for three months before putting it into auction. It sells for £180k and dowie's debt is cleared.
Scenario 2 - The mortgagee just sticks the property in the auction next week with very little advertising or marketing. It sells for £150k and dowie now has no house and still owes £30k.
Scenario 1 isn't ideal but probably within the bounds of acceptability. But what about scenario 2, would dowie think this beyond reasonable seek some redress?
That wasn't in dispute in the first place! Setting up a ltd company to buy it yourself or selling as part of a portfolio etc.. are not the same thing...
Again - the condition here was that marketing is done... that's a box ticking exercise... the bank can show they've done the marketing - they whack it into the auction and go for a quick sale... it's literally in the first line of the post you just quoted so I'm not sure why you're presenting me with cases to prove a point that I didn't disupte and now two scenarios, one of which doesn't apply:
The same principles apply.
So you'd go quietly into the sunset still owing the mortgagee £30k when after a few days marketing and a quick auction they sold your £200k property for £150k?
Not really - it's a completely different principle - an open auction with competitive bidding va say someone setting up their own ltd company and buying at a knock down price.
I'm not sure what hypotheticals around your made up scenarios have to do with anything here - if the banks selling properties quickly at auction after marking them was so obviously flawed then you'd be able to point out the cases... you've clearly searched for them but have had to throw in some other random ones you've found which don't fit... Maybe the property wasn't worth 200k, maybe you should have sold it yourself instead of letting it get to that stage - if they've marketed it and put it in an open auction then it seems they've ticked the boxes and the resulting sub optimal price for a quick sale is what you get.
I wasn't sure what point you were making. I'm saying the principles of selling at undervalue apply to a £200k house or a £200 million portfolio.
Such cases would be dealt with before going to court or in the County Court. For the umpteenth time, those cases aren't reported.
Soldato
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I think when someone says undervalued they are generally ignoring condition for some reason (and value is also determined by the needs of of the purchaser rather than just the market)
E.g Street full of nice semis that sell for 500k and you get one that needs a lot of work for 400k - it's not undervalued - it's a smart purchase if you can do the work for less than 100k to bring it to spec, it's unvalued if you can get the 100k back with just some elbow grease and some gardening.
E.g Street full of nice semis that sell for 500k and you get one that needs a lot of work for 400k - it's not undervalued - it's a smart purchase if you can do the work for less than 100k to bring it to spec, it's unvalued if you can get the 100k back with just some elbow grease and some gardening.
My point was that banks frequently look to make a quick sale on repossessed properties and that tends to result in sub optimal pricing/discounted properties... Main reason there is less of a discount these days is simply because more people are aware of the value offered in property auctions.
Trying to move atm. Went to see a bungalow that was for sale for 350. Checking zoopla is a god send sometimes. They bought the house 7yrs ago for 240 and have done 0, absolutely nothing to improve it. In fact it's probably in a worse state now than when they bought it.
7 years and they're expecting 110k more. I laughed and offered 40k less than asking. I haven't received a response yet. Lol
7 years and they're expecting 110k more. I laughed and offered 40k less than asking. I haven't received a response yet. Lol
Was in a similar situation. The buyer had bought for 290 about 6 years ago and wanted to sell for 410 without doing any improvements, so the place was in worse state.
I offered the average growth rate of the area, which was 17% increase. So offered 340k. They rejected. They ended up selling for 350k a few months later.
I bid on a place on Friday. Was sold for £300k in 2014... bid >600k over £20k the asking price and was refused for a cash buyer... grrr what a nob!!
They had done a lot of works tbf, was a super sweet house! Point being though that past prices aren’t necessarily going to show the true value of the day. You can only really go back a short while IMO and even then... it’s worth what people are prepared to pay for it. Some areas will only become more expensive when the house prices elsewhere have become too much.
Wish I had bid more tbh
Soldato
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Always annoying - but they'll be plenty of opportunities for a cash buyer in the coming months I'm sure!I bid on a place on Friday. Was sold for £300k in 2014... bid >600k over £20k the asking price and was refused for a cash buyer... grrr what a nob!!
They had done a lot of works tbf, was a super sweet house! Point being though that past prices aren’t necessarily going to show the true value of the day. You can only really go back a short while IMO and even then... it’s worth what people are prepared to pay for it. Some areas will only become more expensive when the house prices elsewhere have become too much.
Wish I had bid more tbh
Soldato
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I think you're looking at this from just one perspective. The fact is that the average house price has also increased 40%+ in those seven years. The seller may be moving and sure, they could take a moral standpoint and sell to you for 310k, but the person they are buying from isn't doing that so where does that leave them? You might not see value in the property for 350k, but what you have to ask yourself is how other buyers may value it relative to what other properties are currently available in the area.
Remember that few people benefit from price increases and that includes the sellers. My cost to trade up has probably doubled in the 8 years that I've owned my house and whilst I want to move, it's hard to justify paying what would be required to make a meaningful change. But one thing is for sure, I don't blame boomers for it, I blame the banks for facilitating rampant inflation of house prices.
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How can a huge price increase for your house not be seen as a benefit for the seller?
In the above example, £110k in 7 years for no renovations seems like quite a benefit.
The house they go on to buy will have also increased in value.
this^ we'd like to move at some point but all the places we'd want to go on to live in have risen by more than the % increase on this one. It's a constantly moving field.
Take wages for a comparison. You could argue a new starter getting average wage £27k now is earning more and so better off than someone who started 15 years ago for just £20k. But inflation and international currency devaluation means the spending power of that £27k now is actually worse in real terms.
It's also the fallacy of perceived worth vs actual value. An investor with shares in a company that are rising year on year is not better off until they cash those shares and reap the value. Sitting on shares that have risen doesn't equal having money. It means having POTENTIAL money. Same with a house. The value to the owner is in its continued use. Only when they sell is any profit obtained, but if they;re selling to move elsewhere, only if they DOWNSIZE to a cheaper property and/or location do they actually get any net profit and thus net financial benefit.
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Ok, but if there isn't a big trade-up then there's a huge benefit there then
If there're moving up in houses, by any amount, then there's no benefit for them at all. There would be benefit if the value had dropped.
again, no. It just means they've stayed at the same point relative to the wider market.
You need to think of it in terms of a race with no finish line, just a total km travelled when the bell rings. However far you've travelled in that scenario doesn't matter, only your position relative to the other competitors. If there isn't a huge trade up it's like keeping pace with the field but not overtaking anyone.
Also someone who is joining the race doesn't have to run all the laps covered to date, merely to join the track alongside the current field. The joining fee is steep but once you're in you get the same rules and benefits/risks as everyone else.
We scrimped and saved into our mid30s to get a place of our own. We didn't spank it all on iphones, foreign holidays and the latest trinkets. We went without a TV and limited what we spent, how often we went out, didn't get a car, etc. That latter one more than anything made a big difference - thuogh we did have season tickets to pay for the public transport. We also did our wedding on a budget and various other things. It's about priorities at the end of the day. We know people who blew all their money on depreciating items and while nice at the time would probably, if we were impolite enough to ask, would say that they would have rather been more sensible and put it towards a house sooner than they did.
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That's kinda of my point. I should have ended with it... I think the market will downturn quite badly soon. The people who start the chain at the bottom can't or won't pay it. The people in the middle that want to see their houses can't cause no one is willing to pay these prices and the chain at the top never moves cause they can't get the bottom half to move.
Until people bring these prices down or the mortgages drop from 15 back to 10% it's gonna stall imo.