All Topics / Help Needed! / mortgagee in possession

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  • Profile photo of Cathy.GCathy.G
    Participant
    @cathy.g
    Join Date: 2010
    Post Count: 22
    November 2, 2011 - 5:04 am

    I am going to an open inspection for a house listed as mortgagee in possession. The house will be auctioned with no reserve in 2 weeks.
    The pictures on realestate.com.au look like the place is probably structurally ok- build mid 1990’s. Someone has begun a renovation but not completed it- many things half done which make the place not really tenantable in its current state. I spoke to the agent to try and get some information before the open but he was quite unhelpful. This could work in my favour if he treats all inquirers the same way. My plan is to go to the open, try and get some more information from the agent and look at other properties in the area to get a feel for selling prices of properties not needing renovation. If it seems like the property could be a possibility then I will ask a builder to come and look at it with me to get an idea of how much it ill cost to fix-up.
    Do you have any tips or traps from your experience of such sales?

    Thanks

    Cathy

    Profile photo of CatalystCatalyst
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    @catalyst
    Join Date: 2008
    Post Count: 1,404
    November 2, 2011 - 5:40 am
    Cathy.G wrote:
    I am going to an open inspection for a house listed as mortgagee in possession. The house will be auctioned with no reserve in 2 weeks.

     
    I seriously doubt that. They aren't going to give it away.

    Cathy.G wrote:
    The pictures on realestate.com.au look like the place is probably structurally ok- build mid 1990's. Someone has begun a renovation but not completed it- many things half done which make the place not really tenantable in its current state. I spoke to the agent to try and get some information before the open but he was quite unhelpful. This could work in my favour if he treats all inquirers the same way. My plan is to go to the open, try and get some more information from the agent and look at other properties in the area to get a feel for selling prices of properties not needing renovation. If it seems like the property could be a possibility then I will ask a builder to come and look at it with me to get an idea of how much it ill cost to fix-up. Do you have any tips or traps from your experience of such sales? Thanks Cathy

    Yes you definitely need to do that. Sometimes unrenovated properties aren't that cheap (especially by the time you do all the work)

    You need more than a feel. You need to know what the house will be worth after reno. You need to know how much it will cost to renovate (allow going over budget) and also factor in interest while it's empty. Work out how long the reno will take. Time is money.
    After you get all this info work backwards.

    Final price minus reno cost minus profit needed. = the max you should pay.
    I would want at least 3X your cost of reno. So if the reno is $10K you need at least $30K profit. This varies depending on how much work you do yourself.

    So have your max price ready and go to auction. If it's passed in negotiate from there. They will usually lower their expectations if it's passed in. They like to sell on the day. Otherwise it can draw out.
    tips- above. Traps- don't pay more than your estimated price.
     good luck.

    Profile photo of Cathy.GCathy.G
    Participant
    @cathy.g
    Join Date: 2010
    Post Count: 22
    November 2, 2011 - 11:30 am

    Thanks for the advice Catalyst. The Real Estate agent said there would be no reserve he could be wrong or else maybe he will use vendor bids.
    What are some of the ways you use to know the price it will sell for after a renovation?
    Best Wishes
    Cathy

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