Does it make sense for an owner-occupier to purchase a property on an area with high mortgage reposession rates?
Looking at purchasing my first property and holding on to it for say 7 to 10 years..Obviously there's a good chance one can get a bargain on these areas… but during the "boom" part of cycle, does these areas gains well too usually?
sydneyme,
Good question.
Theoretical on average these areas do go up in prices at relatively the same rate as other areas.
This then poses the question are the values of properties in these areas a true indication or have the properties been sold cheaply by the banks to recover their money thus causing prices to be marginally lower than true value.You can pick up bargains but normally at the expense of someones misery and not the bank who has foreclosed.
I've heard of people buying properties where the neighbors are either close relatives or friends of the person who had their property repossessed and have vented their feelings towards the person who has bought the house cheaply after wards.Banks are obliged to achieve the highest possible price for a mortgagee in possession sale – so you would expect. They are rarely a bargain because of tighter competition.
If you are looking – South Western Sydney Liverpool/Blacktown/Fairfield LGAs.
Scott,
The banks are obliged too but it depends on what is offerred on the day of auction.
I've seen a few situations were properties have been passed in as they haven't reached reserve but then sold afterwards to offers between what is owed and reserve price.thanks c2, scott for your inputs.
I didn't thought about the idea of having "former owner's relatives" as neighbors venting their anger on the new owners, I didn't think some people could be so irrational.
I guess I have to check the neigborhood for that too
Buy in gloom sell in boom … Hello nothing new here …
D
Sydneyme,
Not necessarily irrational but more like frustration at seeing love ones and friends kicked out of their homes from greedy banks.. Put yourself in their shoes.
Maybe if investors stop trying to pick up these type of repossessions from banks then the banks might not be so eager to repossess and kick people out of their homes.
C2 wrote:Sydneyme,Not necessarily irrational but more like frustration at seeing love ones and friends kicked out of their homes from greedy banks.. Put yourself in their shoes.
Maybe if investors stop trying to pick up these type of repossessions from banks then the banks might not be so eager to repossess and kick people out of their homes.
C2,
Banks, greedy??? I have yet to see a bank force money into my wallet. Yes, they may have low standards, but that says alot more about their customers than about themselves.
They have never told me that my LVR is too low and I should borrow another $#@! Million to buy more properties, a bigger house, renovations, new cars, plasma tvs, a pool, a holiday house and a lifestyle. I control my wants, I have no control over my basic needs.
I do not need a new house or the things in the list above – a roof over my head is sufficient. Exercise some discipline over the things that you don't need, do without, get sound financial skills then get advice (use your newly attained skills to understand that advice that you are given).
Scott No Mates,
Some people seem a little quick to think that those that have had homes repossessed must have wasted money on plasma TV's etc. In majority of cases this is not the situation but a nice myth perpetrated by some to justify acquiring repossessed homes cheaply. Maybe you should do the rounds of a few of these bank auctions and hear what has happened for people to be in this situation.
More so a case of over commitment & keeping up with the Jonses.
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