How to sell a London property in negative equity
So you are probably asking the question “what is negative equity? Negative equity is a very common problem where a property is purchased at the perceived property value at the time of purchase, and over a period of months or years, due to the likes of a down turn of economical factors as well as changes to supply and demand, the value of a property reduces to below the value of the mortgage taken out by the owner.
Let’s take an example of a property we recently assisted a seller to sell in Mile End, East London. This was a 2 bed flat, the owner had purchased in 2007 for £195,000, on a dream mortgage of 100% finance. This London flat had been rented out by the owner for the past 3 years, with the tenants not treating the property with too much respect. The owner decided to sell the property in early 2010, so asked 3 estate agents to come and value the property. The seller received valuations of between £165,000 to £175,000. Obviously this was a listing price and the actual selling price would be below this amount. The seller decided to list the property with the agent who offer the highest value of £175,000, and 14 months later, and 2 offers around the £145,000 mark, the seller was still stuck, and was now falling behind in her mortgage payments. The property had in essence dropped into £50,000 negative equity. The seller was completely at a loss for solutions because she could not sell at a price that would cover her mortgage of £195,000, because if she did, she would walk away owing the bank £50,000. On top of this, she also was unable to make the mortgage payments.
Sell My House Quickly Please stepped in and helped the seller to restructure the way she was selling the property. We realise that at the moment across London, there are lots of people who want to become home owners, but simply are unable to get a mortgage. We found a buyer who was happy to step in making the mortgage payments each month, are offered them a delayed completion whereby they were able to secure the property at the mortgage price, but they could do this years down the track, at their own leasure and at a point in time that the market had cought up to the property mortgage price. The seller was happy as she was finally able to secure a buyer, and the buyer was happy as they were able to buy a London property without qualifying for a mortgage.
The question is, if it worked for this London property in negative equity, if you also are in negative equity, is there any reason it could not work for you and your property anywhere around the country?
Fill out the form to the right of the page and get your London negative equity property sold today.