Foreign investors, experienced in the acquisition of banking real estate in London, are aware of the fact that the bank initially exposes an object on a strictly fixed price, and it is usually overpriced. However, the practice shows that investors can bargain on the final amount, since banking institutions are primarily interested in profitable sales of the objects on balance, given the fact of a lending opportunity at the same time; therefore, are willing to significantly reduce the value of the property. When buying real estate from a bank it is recommended to announce your own proposal.
In London, if you purchase new or resale housing is accompanied by the essential independently assessed examination, which establishes the technical compliance of housing and its operational capabilities. Usually, this procedure is extended for a period of 3 months. Banking services are interested to avoid such delays, so often stop at the ‘average’ price between the investor’s proposal and price of proposal for the client. Especially recommended to appoint its own proposal to investors who seek to invest in the banking elite housing located in central London.
However, the purchase of real estate bank is also accompanied with certain of disadvantages. Those investors planning to acquire confiscated or seized property must be informed that a reduced cost of such facilities is largely defined by technical condition of housing and commercial office spaces. About 70% of the bank property in London requires cosmetic or major repairs, and the scope of which defines the discount amount.
That is why in some cases, banking real estate can be purchased at a price of 80% below the average and around 40% lower than its nominal value. So, before you complete a purchase, you should better evaluate the potential expenses associated with repairs – cooperating with the 3rd party organisation, not interested in the deal, could be a reasonable approach and this investment may pay off. However, this service, just like all the legal expenses associated with conveyance solicitors services are implied to be covered by the buyer. If the property is sold at a discount of 30%, then perhaps a better option would be the purchase of resale property at a higher price, but without the need to invest in repair, especially taking into account the tough technical and engineering requirements for the buildings in the country. The average price of typical houses in London in 2014 equaled to £600,000. However, even taking into account the need to invest additional capital for the repair, the size of the discount may covers it, providing an investor with a pure income. When buying real estate bank should also consider the need to sign new contracts with public utilities companies. It will be included in the estimate of additional costs, however, it is highly likely to be a burden because of the contract renewal time frames.