Another Mortgagee Sale

Discussion in 'Investment Strategy' started by Stegve, 18th Nov, 2017.

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  1. Stegve

    Stegve Well-Known Member

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    Hi again, its been a while.
    Looking to get back into the market with making an offer on a mortgagee sale.
    Never had experience with these sales so i hoping I can get as much info through the forum.
    Just to note, this is not an auction. You make the best offer once and only and bank will review.

    The property is only 10 years old but has not been looked after. The home is structurally sound but has no floor coverings few damaged walls, doors etc. Outside requires full landscaping front and rear. The home was built on dirt and that was it. No paths, drive no nothing. Council drive entry on the wrong side of property as well.

    looked into recent sales in the street and I think the home is still overvalued in its current cond which requires at least $60k-$70k poured into it which would over capitalise.

    Is there anything to be careful of in these purchases? contract, debts. I would be putting in a cash uncond offer but not sure of any hidden charges or liabilities from previous owner.
     
  2. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    Look at it as any other sale. Ignore the "Mortgagee" part because it's irrelevant. Once you've cleared out this baggage, is it a good deal?

    Many people see the title "Mortgagee sale" and they automatically think it's an opportunity. A lot of people. This can attract high demand which pushes the price up.
     
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  3. BarneyRubble

    BarneyRubble Well-Known Member

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    Sounds to me like you have answered your own question.

    Agree with Peter too, mortgagee does often bring in additional interest. Additionally as the sale is completely financial, there is often little to no discounting in price.
     
  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    further........ on the financing side, one may un into issues with the state of the place, and "we dont dont believe its worth the price reached on acution day because the agent said. there was a lot of interest" :(

    ta
    rolf
     
  5. Perthguy

    Perthguy Well-Known Member

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    I went through this with a forced sale last year.

    Property was put on the market and sold quickly but fell through: low valuation.

    Back on the market and sold at a lower price but fell through: low valuation.

    Myself and a mate put in a new offer maybe $100,000 less than the first offer. We used existing loans so didn't need a valuation. I am not sure it would have valued at the price we paid. The place had issues.

    Buyers seeing potential in a property and banks seeing value in the same property are two different things.
     
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  6. Shady

    Shady Well-Known Member

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    ...and another 5 mortgagee sales
     

    Attached Files:

    Perthguy likes this.
  7. Beano

    Beano Well-Known Member

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    Water finds its own level
     
  8. Blacky

    Blacky Well-Known Member

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    Ducks quack.
    Balls bounce
    And fish swim

    But what’s the point?
     
  9. Stegve

    Stegve Well-Known Member

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    Thanks for everyones input.
    I'd be making a unconditional cash offer, no finance is required.
    I know what the land was purchased for and roughly what the house cost to build 2008, done rough calculations on what the owner would of payed over the last 9 years in repayments.
    I know the current market value in the area, capital growth in the last few years has been very little.
    My main concern is outstand debts on the property. Would I be liable for these debts? eg: outstanding council rates, etc.
    Should I be asking to see a contract/condition of sale prior to my offer?
    Offer deadline is in 4 days time.
     
  10. Chivaun.Shortis

    Chivaun.Shortis Well-Known Member

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    I would be asking those questions before I signed any contract of sale as you do not want to be purchasing their outstanding council rate debts
     
  11. hobartchic

    hobartchic Well-Known Member

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    Yes, you may be liable for debts on the property - get a copy of the title and any building reports the agent has. Get a lawyer to do due diligence as well. Check maps re: landslide risk, fire risk and flood risk. Also find out if there was any criminal activity at the house as well (less likely).
     
  12. BarneyRubble

    BarneyRubble Well-Known Member

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    6 even. The title searches on those properties made my brain explode. So. Many. Caveats.