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Buying a Property in Receivership

Middle_Resource5574

As everybody knows, the property market at the moment is very difficult for buyers in certain counties and on relatively small budgets.

I thought that I had gotten very lucky a number of months ago when I went "sale agreed" on a property that was within my budget as it had been vacant for some time and was taken into receivership.

However, as the months have gone on and there has been delay after delay getting the contracts from the Receiver for a whole host of reasons, I am starting to think about pulling out of the sale. I don't want to do this, however, since I would not be able to afford a similar sized property within my budget.

I am aware the Receivers advertise properties for sale before many of the issues with contracts and title have been resolved, so often there are delays.

But has anyone here purchased a property that was in receivership with one of the larger Receiver companies? If so, how many months did it take?

I am just looking for a rough estimate so that I can assess whether it is worth my while sticking with it, or pulling out.

Any advice on how to proceed or anyone who has any idea of timeframes would be greatly appreciated!

(I realise there are a couple threads on this topic already, but they are from some years back and the property market has changed considerably in that time)

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Comments

Claw Hammer

Receiverships are not all the same. there are different banks, receivers and solicitors involved. They all have different ways of doing things. In a lot of cases the sale of the property has a low priority in relation to their other work. When a receiver is appointed the bank may not have all the documentation neeeded to make title. What happens in one situation may not happen in others. Sometimes the owner starts making trouble or negotiating. If you need a mortgage to buy t6he property, be prepared for the fact that it might not be mortgageable!

C3PO

Given the situation as you describe it, I would be prepared to dig in and wait it out. If there is nothing else around that you like within your budget you really have nothing to lose? At the same time I would keep badgering their solicitor and looking out for alternatives.

Middle_Resource5574

https://www.boards.ie/discussion/comment/121202064#Comment_121202064

Thanks very much Eddie!

Eddie2008

Sorry and yes, the solicitors secretary was hounding them, I had chats with her at the time about it.

Eddie2008

Yes, the solicitor had to apply pressure to get the contracts from the receiver. That’s what caused the delay, but once received it was sorted in a matter of weeks. At no point did our solicitor suggest against the purchase, he just warned of the delay.

I would not be put off doing it again for the right property.

Middle_Resource5574

https://www.boards.ie/discussion/comment/121200348#Comment_121200348

Thanks - I appreciate that info!

Yes, we are in the same boat now with nothing happening for months. But we are still hopeful that it will happen at some point - although we do not want to be waiting 2 years as the other poster mentioned.

Might I ask, who did your solicitor apply the pressure on? The Receiver? And was he ringing them frequently? Ours is telling us that there's nothing he can do till he gets the contracts, which sounds to me as though he's not willing to commit the time to pressurise the Receiver or their solicitors, so perhaps it is time to change solicitor?

Middle_Resource5574

https://www.boards.ie/discussion/comment/121200549#Comment_121200549

Two years is a long wait! Thanks for the info!

tesla_newbie

I’ve bought several BTL,s that were receivership sales , in my opinion they haven’t offered enough of a discount to the general market for several years now

frank730

a friend of mine bought an apartment in receivership, it took just over 2 years. if you are prepared to wait that long it's worth it, as you said it's cheaper than other properties in the market. there will be lots of hassle with paperworks etc. but that's mostly for your solicitor to deal with, you just have to wait.

Eddie2008

We purchased from a receiver some years ago. We got a good deal on it too. The process did take longer, but we knew this would be the case from the start. End to end it took about 6 months. For months it felt like nothing was happening, and then all of a sudden things just happened and it was done. Our solicitor did apply pressure towards the end though. Looking back have no regrets.

[Deleted User]

https://www.boards.ie/discussion/comment/121199333#Comment_121199333

Just to be clear, Receivers do sell properties. It may be more drawn out, simply because the buyer is not dealing with a seller motivated to sell quickly, but they do sell.

antoinolachtnai

You might never get to do this. There is no point spending money on this anyway, if the receiver isn’t going to sell to you. You may be dodging a bullet here.

Middle_Resource5574

https://www.boards.ie/discussion/comment/121199038#Comment_121199038

Do you mean due diligence in terms of a survey of the property? This has been carried out and the surveyor was happy enough with it.

If you mean due diligence in terms of the title, saleability or any outstanding legal issues, how can I carry that out? I do not have access to the Receiver's solicitors and am being kept in the dark about what I am buying.

antoinolachtnai

No I am not saying that. The truth is, you most likely don’t even know what you are buying. You have not conducted much due diligence yet. Many other people with more knowledge and experience than you have looked at this property and weren’t prepared to bid as much as you. There is some reason for that.

Threatening to pull out of the sale will not make any difference. The agent will simply wish you all the luck in the world if you are not comfortable with waiting.

if you had the wherewithal and funds you could make a side deal with the owner I suppose. But in practice it would be difficult for you to do so.

Middle_Resource5574

https://www.boards.ie/discussion/comment/121198958#Comment_121198958

So you are saying that receivership properties are only sometimes sold at a discount? And that most properties advertised at a discount are simply bargaining chips or options while the Receiver continues to deal with the former owner?

Is there any way - beyond threatening to pull out of the sale - to progress things and make the receiver want to get rid of it too?

antoinolachtnai

It is unrealistic to expect that you will be able to get a mortgage on a property with this level of discount if you ever even get the opportunity to purchase it. All that has happened so far is that the receiver has expressed an informal interest in selling it to you. They haven’t actually done anything about it.

Middle_Resource5574

https://www.boards.ie/discussion/comment/121198894#Comment_121198894

Thanks for the advice

The main problem is that the property is a bargain. It is a house, which I would not be able to usually afford. The only other properties in my price range are apartments in complexes which are not that great and have huge management fees.

C3PO

As previously suggested, I would leave your deposit where it is and start looking for something else. You’ve nothing to lose by doing this!

antoinolachtnai

It gives them options. It’s not that they don’t intend to sell but it may turn out to be easier to do a deal with the property owner (with consent of the bank) rather than involving a third party. The sales process gives them a valuation.

Middle_Resource5574

https://www.boards.ie/discussion/comment/121196305#Comment_121196305

Thanks

Why is it in the interest of the Receiver to even advertise it or deal with the agent, if they don't intend to actually sell the property in the end?

antoinolachtnai

You may never receive the contracts. This property might never be sold to you. Your bank might not accept the property as collateral for a mortgage which means you would not be able to buy it. The agent has what he most needs from you, a valuation. Leave your deposit on the property if you like but realistically you need to look for something else too.

[Deleted User]

Though I cannot tell you about duration, I can tell you that you need a very careful, and thorough survey done of the property. You may already be aware of this, Receivers are exempted from some obligations which apply to private sellers.