Mortgagee sales.

When the market was dead and places were taking ages to sell I found banks were just trying to get rid of the mortgagee properties.

I had agents telling me how as long as the bank got ... they just wanted it gone because they are sick of trying to sell it.

 

This is true. But doesn't happen anymore.

In 2012 picked up a mortgagee property for what the vendors were owing to the bank. It was far below market value

 

Most probably would as buyers think they are going to get a good deal.

 

The market will determine the value not the bank. The bank just has an obligation to sell at a reasonable value and rely on the agents. They just want recovery. If the mortgagee property is in Sydney I wouldn't expect a discount bargain. In a dry market the position is different.

 

wondering if anyone has ever negotiated with a bank on a mortgagee sale at post-offer acceptance stage?

e.g. once offer accepted, proceed with B/P and find adverse issues with property

anyone ever gone back to the bank with the list of builders quotes to negotiate a price off the original purchase price? wonder what the bank would do in this situation...

 

Why would they even consider such a negotiation if you are in a binding contract?

Doesn't hurt to ask, but they have no emotions unlike an individual seller.

 

Doubt the bank would entertain any conditional offers.

 

A client of mine is basically a glorified private lender and mortgagee sales are common.

The assets are always sold within market - the main dispute is the borrower who has an over inflated view of their asset prices.

They might sometimes be sold at the bottom of market but it is still market.

 

Agreed although interesting case here in Brisbane involving a forum member where Bank of Qld took possession as they heard a rumour the borrower was removing the house and selling the 2 separate land titles. Sale price would have been sufficient to clear their debt 3 times over.

They took possession claiming he had breached the mortgage conditions and sold the property privately at less than 50% of market value (No Auction nothing).

Forum member is now suing the Bank for the shortfall. Personally i can't see the Bank has a leg to stand on but will be interesting to see how it plays out.

 

can i ask how you can identify mortgagee sales?

i have never seen one on realestate.com.au or domain; wondering if you have to ask the agent for the underlying reason or is there a website that can show which ones are mortgagee sales?

 

U ask the agent.

 

Look at names on contract, most will tell you anyway.

 

Interesting topic as I am currently toying with making an offer on a property subject a court judgment (Sherrif auction) but a little concerned about the ability to get finance to cover the balance owed to the mortgagor without necessarily having possession.

Any brokers able to comment on this scenario?

 

Standard purchase. Mortgagee gets paid out first, judgment second any left over goes to the owner.

All you need to worry about is clear title or you won't be able to settle with finance.

 

If is a normal lender, they won't release unless covering what is owed unless a very poor market.

Ask the agent selling the place.

 

Ahh but here's the thing. As I understand it the sale is being forced by those enforcing the judgment against the owner for private seperate debts.

So it appears they have "skipped the line" in the creditors queue. The sheriff sells the owners interest in the property minus the debts they are enforcing.

So it is left to the buyer to untangle the rest ie. take possession, pay out remaining debts to obtain clear title such as mortgage, rates owed etc.

In a nutshell if a buyer can self fund the initial costs such as purchase price, duties, legals at what point would you need to get to, to be able to obtain a loan to pay out the mortgage?

Risky business I know...

 

No, lender if they have first mortgage will not let this happen, simple as that, you can't buy unless the person/entity at the top of the chain is satisfied, they simply won't release.

 

This ^^^

Except maybe insert other interested parties after lender and before owner, such as councils etc