Opinion / Assessment of a Property

  • Erstellt am 2016-03-21 12:48:53

Phoenix85

2016-03-21 12:48:53
  • #1
Hello everyone,

about a year ago we started looking for a property for ourselves (my girlfriend and me) as well as my girlfriend's parents.

A regular purchase would be preferable for us and also for the financing bank ;) but I have already dealt with the topic of foreclosure and financing would also be feasible in that case.

Since there have already been properties in foreclosure that seemed interesting at first glance, I have visited the district court several times to inspect the relevant documents and to attend the auction dates to see how such a process works. Unfortunately, during the viewing of the properties, we always found that for various reasons it simply was not the right fit.

Apparently, there do not seem to be many interested parties for foreclosures in Remscheid either. So far, all properties at the auctions I attended were sold well below market value or the bank opposed the auction because the desired amount could not be reached. Often there was only one bidder who really had interest in bidding for the property.

The regular properties were unfortunately also not of interest so far due to their location or condition, or the price/performance ratio simply did not fit.

Now we have finally discovered a property which we really like in terms of size and room layout, and the location is simply a dream. This is also a foreclosure. Unfortunately, due to a longer vacancy, the condition is far from optimal.

It is a two-family house with a granny flat and outbuildings (double garage with party room) with a living area of 217 m² on an approximately 1,600 m² sloped plot.

The property was built in 1958 and the walls consist of unspecified masonry with a 30 cm wall thickness.

As I learned from the co-owner, she wanted to sell the property regularly already three years ago, but the second co-owner (brother) refused since he apparently still lived in the property at that time.

Meanwhile, the property is vacant and described as uninhabitable in the appraisal, as water and electricity have been turned off. Accordingly, the property is not heated.

The foreclosure notice was entered in the land register on 23.03.2015 and the appraiser’s inspection took place on 17.08.2015.

The equipment of the property in terms of floor, wall, and ceiling coverings is described in the appraisal as outdated. This does not bother me, as these are supposed to be completely renewed and adapted to our wishes anyway; this will be carried out by ourselves (through the family).

The same applies to the sanitary installation, where the supply and drainage lines must also be checked and possibly renewed due to the missing maintenance. Since the bathroom and also the kitchen are planned in different (larger) rooms anyway, the lines have to be completely re-laid anyway; this will also be done by ourselves (through the family).

An inspection or partial replacement of the electrical system is also indicated in the appraisal. Of course, the question here would be whether to plan a complete renewal of the electrical system. I still want to clarify what this would cost if a friendly electrician takes care of it and which work can possibly also be realized as self-performance.

What bothers me most about the property, however, are the moisture damages due to the lack of maintenance. The damages in the wall and ceiling areas (mainly in the corners of the rooms) show through peeling and discoloration of the wall coverings. Mold was apparently no issue at the time of the appraisal.

Regarding the oil heating system, I am still undecided whether to replace it or postpone this if it still works, as I do not have any detailed information about the boiler yet. There is definitely gas available in the street, and alternatively, a pellet heating system is also under close consideration.

A viewing was not yet possible at the current time. I am currently trying to reach the second co-owner who has access to the property.

The property is located exactly in the district where we would like to live. Then the large plot which borders directly on the forest and the quiet location in a dead-end street. Then the house itself, which, apart from the condition, also fits well make the decision very difficult :(

Are there perhaps people in this forum who have already acquired a property that stood empty for a longer time and was unoccupied? Some experience reports would help me in my decision.

Best regards
 

wpic

2016-03-21 13:37:05
  • #2
You have to look closely and, at least based on the expert report, draw the - hopefully - correct conclusions before the auction date if a prior inspection is definitely not possible. If the property has been vacant for several years and is described by the expert as uninhabitable = ready for demolition, this assessment should be taken seriously. Wanting to completely renovate a property that is ready for demolition usually equals at least the cost of a new build. Occasionally, it can be significantly more expensive. The extent and type of structural damage are decisive, as well as the amount of modernization needed. The heating system may be so outdated that it is no longer allowed to be used according to the Energy Saving Ordinance. This applies to all boilers older than 30 years. Houses from this construction era are also very economical and sometimes built in a very "unconventional" way, which can cause an architect or structural engineer to puzzle over renovations/extensions and expansions.

Buying the property unseen can then potentially open a can of worms after the purchase. Based on the size of the property and the general condition estimated from the existing expert report, the costs for such a complete renovation could at least be roughly calculated. If the location is very good, demolition and new construction could also be the possibly more reasonable option, which is increasingly chosen nowadays to acquire an attractive plot outside new development areas.
 

Phoenix85

2016-03-21 14:18:35
  • #3
Thank you wpic for your assessment.

A purchase without an inspection is definitely not an option for me here at first. The risk would simply be too great for me.

Since I have already spoken with one of the co-owners, I am confident that I can also speak with the other co-owner who has the keys to the property.

This is a forced auction initiated by the city treasury of Remscheid because obviously ongoing costs have not been paid. The land register is otherwise free of encumbrances.

Accordingly, the owners should receive a residual amount from the auction, and thus it is ultimately also in the owners' interest to achieve the highest possible price for the property, which will usually be higher after an inspection.

The property is definitely not classified as ready for demolition; the determined market value would be significantly too high for that.

The current uninhabitability is solely due to the lack of water and electricity supply.

Below are the information on the depreciation:





 

miho

2016-03-23 21:34:08
  • #4
Location, location, location,... ;-)

Just consider the worst-case scenario: You pay amount x in the auction. What is the land alone worth? Do you know the official land value map? What could alternatively be built there? Zoning plan?

Assuming the house would have to be torn down after all. Would that be a disaster given the price? How much of the purchase price will be for the house and how much for the land?

Just for comparison: For our already renovated house from the same construction period, we paid the land price plus the renovation costs. That means, without renovation, the house was worth nothing.

Let me know how it goes.
Good luck
Michael
 

DG

2016-03-24 15:49:50
  • #5
Small addition: the costs are set so that the property could be rented out again, so probably rather lower standard.

In case of vacancy/disinterest from the current owner, you also need to watch out for mold. I wouldn’t expect anyone to do anything for the property or for you anymore, it sounds very much like the bank will keep everything and the owners will end up with nothing. Accordingly, their motivation will be low.

Best regards
Dirk Grafe
 

Phoenix85

2016-04-18 13:42:53
  • #6
The owners would definitely have still received money, since the house is free of encumbrances and only the ongoing ancillary costs of the city of Remscheid were not paid. The city treasury of Remscheid also informed me that the bid at the first appointment is already granted at 50% because the claims are covered and are probably below that.

However, the property caught fire last night, so the appointment on Wednesday will of course not take place.

Since the infrastructure of the house was actually shut off, a technical defect is rather unlikely. My personal opinion is that a co-owner, who was also in conflict with the other and told me "I will see this through to the end," could be involved.

But as I said, that is my personal opinion ... The police will hopefully investigate what actually happened.
 

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