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Buying negative equity

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  • 15-01-2014 12:37am
    #1
    pacman1989
    Registered Users Posts: 74 ✭✭


    Just wondering would a house thats in negative equity be worth less to a buyer than if it wasnt. What are the complications of buying. Is it just more time consuming or is there more. I have a bid on a house that has a guide price of 200. Put in an offer for 180 which was rejected and was then told the house in in negative equity. House has been on the market for 2 months now and is in the waterford area. 3 bed detached in good condition. What should be the next bid i would put in. There have been no other offers on the house as of yet and i would say the area is in average demand . thanks


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    #2
    the_syco
    Registered Users Posts: 37,301 ✭✭✭✭the_syco


    pacman1989 wrote: »
    Just wondering would a house thats in negative equity be worth less to a buyer than if it wasnt.
    Yes. Negative Equity generally means that the house cost the owner more than anyone in their right mind would pay for it now.
    pacman1989 wrote: »
    What are the complications of buying.
    You put in a bid, the bid gets reviewed by the seller. But the seller is the bank, and may not review your bid straight away. They may take 3 weeks to review it.


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    #3
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    theoretically a house for sale in NE isn't worth any more or any less to a buyer than a house in positive equity.

    you could potentially argue there is an opportunity value associated with the purchase. If for example you knew the current owners were in arrears or had a tracker as both of these would make a lower offer more attractive to the sellers bank than if neither of these scenarios existed.

    It would be very much an individual sale scenario though. Re your offer and the current house. You made an offer which seems reasonable to me based on the asking and the location and demand. There are no other offers on the house so if I were you id call the EA put a time limit on your current offer.

    Put the pressure on them. If they don't accept don't up your offer , never bid against yourself. Move on and find somewhere else if needs be.

    re timelines a NE sale is going to take significantly longer to complete than a standard sale so make sure your a patient person :)


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    #4
    djimi
    Registered Users Posts: 13,237 ✭✭✭✭djimi


    Considering the seller is losing money on selling a house in NE one way or another, I dont see any reason to expect that the house can be purchased for less than it would otherwise (if anything, Id expect the seller to want more than the market value if possible!).

    As above, the only advantage might be a motivated seller, but the same could be said of any sale I guess.


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    #5
    pacman1989
    Registered Users Posts: 74 ✭✭pacman1989


    Put the pressure on them. If they don't accept don't up your offer , never bid against yourself. Move on and find somewhere else if needs be.
    :)[/QUOTE]

    I feel as though 190 would be a fair figure for this property and thats the max i set myself before i started bidding . The thing is the house is very good value at that in my opinion and it ticks all my boxes. If i dont bid against myself the chances increase of another buyer coming in and causing a bidding war which im not getting involved in


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    #6
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    well if your prepared to go to 190 then no harm going to it with the provision its a final offer or go to 185k if they say no ask the EA what it will take to get off the market. Bit of negotiation later you should able to arrive at an agreement for 190k hopefully.

    look at it this way you made an offer they flat out refused, if your offer was to try and get the best value but you are / were prepared to go to 190k then you kind of anticipated this might be the response.

    Just remember if they are in NE the bank will ultimately have a say on weather your offer is acceptable or not.


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    #7
    Ray Palmer
    Registered Users Posts: 8,394 ✭✭✭Ray Palmer


    pacman1989 wrote: »

    I feel as though 190 would be a fair figure for this property and thats the max i set myself before i started bidding . The thing is the house is very good value at that in my opinion and it ticks all my boxes. If i dont bid against myself the chances increase of another buyer coming in and causing a bidding war which im not getting involved in


    I am confused on this you think 190k is fair but also think it is very good value at that price? That doesn't sound fair then as you are suggesting it such a great price. A fair price would be one where you think the value is right and not great or bad values.


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    #8
    pacman1989
    Registered Users Posts: 74 ✭✭pacman1989


    Ray Palmer wrote: »
    I am confused on this you think 190k is fair but also think it is very good value at that price? That doesn't sound fair then as you are suggesting it such a great price. A fair price would be one where you think the value is right and not great or bad values.

    ????????????????????????????????????? dont understand what your getting at . Obviously im going to try and get the best price for myself


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    #9
    Ray Palmer
    Registered Users Posts: 8,394 ✭✭✭Ray Palmer


    pacman1989 wrote: »
    ????????????????????????????????????? dont understand what your getting at . Obviously im going to try and get the best price for myself
    You claim 190 is fair that does no equal very good value so not a fair price. Obviously you want the best price but you don't want it to be fair so lets not pretend;)


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    #10
    djimi
    Registered Users Posts: 13,237 ✭✭✭✭djimi


    pacman1989 wrote: »
    ????????????????????????????????????? dont understand what your getting at . Obviously im going to try and get the best price for myself

    Chances are what is very good value for you is actually cheaper than the house is worth (otherwise it would just just normal value), hence Rays comment that a good value price for you is probably not a fair price for the seller. You cant have it both ways!


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