Key Facts

  • The three-bedroom house at 127a Clevedon Road, Papakura, Auckland, is to be sold at a mortgagee auction due to unique circumstances.
  • Access to the property is blocked and potential buyers will not be able to go inside before auction on December 6.
  • Two luxury properties – one at Cheverton Place, Kohimarama, Auckland, and another on Cliff Road, St Heliers, Auckland, also had to be assessed only from listing photos. Both listings were withdrawn earlier this month.
  • Mortgage advisor Jeff Royle says mainstream banks rarely lend on mortgagee auctions due to no warranties from the vendor. Exceptions can occur where buyers have existing equity with the bank.
  • It’s common for chattels such as curtains, carpets, light fittings, kitchen cabinets etc., to be excluded from such sales, and it’s possible for prior owners or contractors to remove such items before settlement.
  • Insurance for mortgagee sale properties can be challenging to obtain, and most insurance policies would only cover damage from settlement date.

Article Summary

The property at 127a Clevedon Road in Auckland is being offered for sale at a mortgagee auction, drawing investor interest due to its potential heavily reduced price. However, due to unique circumstances, there won’t be on-site access before the auction. Potential buyers can’t partake in an interior viewing, presenting a risk as they can’t guarantee the condition of the property’s interior.

While this property’s current owner is unresponsive, having a cooperative owner rises the chance for a mortgagee sale property to be sold closer to its true value. Mortgage auctions generally attract a large audience, many hoping for a good deal. However, these types of sales present various legal risks and the involvement of a non-cooperative residence might lead the buyer into a legal eviction process.

When it comes to financing, mortgage advisor Jeff Royle suggests that major banks aren’t keen to lend for these kinds of sales due to lack of warranties from the vendor. Although, exceptions might be made if a buyer has other assets mortgaged with the bank that could cover potential losses on the new property. Insurance is another hurdle for buyers – these policies usually cover only damage from the settlement date, but securing insurance can be difficult due to underwriters needing to assess the condition of the home.

The case of 127a Clevedon Road highlights the risks and challenges of buying properties at a mortgagee sale. These sales can potentially offer cheaper prices, but they come with the uncertainties of property conditions, legal risks, financial issues, and insurance dilemmas.

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