20th Aug 2019
There are three types of motivated sellers in the market. The distressed, the divorced, and the dead. People in these categories must sell, due to their circumstances. They do not have the luxury of choice.
In a market such as this one, comparables cannot be relied upon with the same confidence they once used to command. The market is in a flux. There’s a perception out there that if you purchase a property now at retail value, it may be worth even less in 12 months’ time.
This environment, coupled with the three categories mentioned above, is the perfect combination for the shrewd investor.
Probate is a legal document which grants authority to deal with a deceased person’s assets.
Most probate properties have certain symptoms that come with them, for example there’s that musty smell. They often come with the benefit of old well-made furniture. These properties usually require a total gut out; and it can be assumed they do not confirm to any of the current regulations. You can forget looking at the energy efficiency readings. Almost always they have short leases.
The more variables you have in a deal the more chance it is a deal. Sometimes you also have a seller(s) who often wish to cash in on their new found wealth. Their need to have the money in their bank account outweighs the need to achieve maximum price.
If the property has a short lease, as well as requiring full refurbishment, most lenders will not touch it. The short lease effects the security for the lender. Most people don’t appreciate a BTL mortgage is given on the basis the property is in a lettable condition. If this is not the case the mortgage will not be granted. There are a few lenders who do refurbishment products, they, however, require a minimum lease length.
A short lease, these days, is relatively easily quantifiable in advance. It needs work, again not a massive issue. However, having so much cash tied up in one deal may be tough for certain buyers.
In conclusion, by the very word probate on a property, the chances are you might be staring a deal in the face.