When is a bargain not a bargain?
Following the property price crash came the bargain hunters. TV programs told us all how cheap property was and that if you offered 40% below the asking price the vendor would happily accept the offer with a smile. Reality was somewhat different.
The real bargains went early. Vendors that needed to sell up for genuine reasons priced their property to sell quickly and sold. Those that were in negative equity but could no longer afford to keep the property handed keys back to their bank, hopefully negotiating that as being in final settlement of their debt.
There was an assumption by many that cheap bank repossessions were great bargains but remember the old adage … “if it’s cheap then it’s cheap for a reason.”
Many back repossessions were stripped of anything valuable/saleable before the bank took possession. The banks offered all the properties to their list of investors first and those turned down stayed on their books. But banks didn’t pay utility bills or community fees, (or any other bills either!), so services to the properties were disconnected, gardens became overgrown and the properties fell into general disrepair.
Often these properties are in ‘difficult to sell’ area too, hence the reason why the original owner couldn’t sell it themselves. Whatever property you buy the chances are that at some point, probably years into the future, you will want to resell the property so, strange though it may sound, that is a factor that always needs to be considered when buying. If the investors are not interested, the original vendor couldn’t sell cheap and the bank have had it on their books for a few years at a low price with no buyer, then the chances are it will always be a hard property to sell.
There are always, in any market, good value properties and we search those out for our clients. But remember that not all cheap properties are good value.
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