Gazumping on a repossession

jimmmyc

Hi all, I made an offer on a house which was a repossession, its on a normal sale with an agent. Our offer was accepted, but then a cash buyer made a higher offer at the asking price which we matched. The cash buyer then put another offer in an extra 2k. The sellers AMG property services acting on behalf of Halifax have accepted that offer, we offered an extra £2.5K but the agent said that AMG won't accept the offer, unless we have a survey to confirm the valuation but then the other party could still put in a higher offer!

We also have a huge deposit and our mortgage in place, so we would have been able to complete within 28days as required.

So basically Halifax accepted our offer and then we were gazumped even though we matched the other buyer. I wouldn't have thought the Halifax would have encourged that kind of thing!

Has anyone else experienced anything like that??

cattie

On repossession properties the mortgagee is obliged to get the highest price possible for the house, so the morals of guzumping don't come into it.

Usually once an acceptable offer has been received the property will be advertised in the local paper asking for any higher offers to be received within 7 days, thus actively encouraging further offers.

I don't quite understand why you've been told to have a valuation before they will accept your higher bid, unless they are concerned that you will have a shortfall in your mortgage amount by offering over market value, so won't be able to proceed with the purchase anyway.

Tassotti

Is it worth getting into a bidding war with a cash buyer?

If you believe it is, get an independent survey done on the property. If all figures stack up, then go for it.

But be careful you don't overpay for the property.

The agents and mortgagees have to get the highest price for the property (although they are covered by insurance anyway). Spose it keeps the premiums down.

BobProperty

jimmmyc wrote:

...Has anyone else experienced anything like that??

Yep, many years ago I offered £x for a terraced house that was a repo, and gave the estate agent a nominal deposit. Building society sold the house to someone else at the same price "because they were a first time buyer". Got cheque back from estate agent. So being stitched up by a vendor, even when they are a building society, does happen.

jimmmyc

Thanks for all the info, the reason they won't accept the bid is because they are worried about the valuation but its only 5k over the asking price £290k!!! I think they just want to get on with it now.
What bothers me most is I am offered the same amount which was accepted and can complete within 28days, yet they are still going with the others.

Oh well, better start the house hunt again.

NAR

Could the buyer be a friend of the seller and/or EA?
Does sound strange considering your circumstances.

Doozergirl

NAR wrote:

Could the buyer be a friend of the seller and/or EA?
Does sound strange considering your circumstances.

Come On! :rolleyes: A verified cash offer is better than an offer requiring a mortgage because of the potential problems and time delays caused by a lender, even with a large deposit. Regardlessof the OPs good intentions, the fewer parties with a vested interest in the property, the better the chance of a quick exchange of contracts.

It's both annoying and sad for the OP, but this is the very nature of what happens with repossessed properties. It's been said before but the amount of admin work that has to be done, means that if an agent were going to do the dirty, a repo would be the best place for them to get caught red handed!

jimmmyc

Hi Doozergirl, thanks for the info, I am totally gutted about this. So, its seems theres nothing I can do??!!

Doozergirl

Sorry jimmyc, unless you want to up your offer!

I'm potentially in the same boat as you. We have had an offer accepted (as far as it can be) on a repo. We waited over two weeks for an answer and they've come back and given us two weeks to exchange. Luckily, we can buy with cash and remortgage quickly which means we won't be exactly in your situation but it's a knife edge nonetheless. There's great potential for us to be gazumped once the ad has gone in the paper and we've paid for searched already. It's leasehold which complicates things and our solicitor has Fri, Mon & Tues as holiday so how we're going to do it in two weeks I don't know!

Ho hum.

NAR

Doozergirl wrote:

Come On! :rolleyes: A verified cash offer is better than an offer requiring a mortgage because of the potential problems and time delays caused by a lender, even with a large deposit.

OP stated "We also have a huge deposit and our mortgage in place, so we would have been able to complete within 28days as required."
I am taking that as fact, which is why I made my comment - hardly worthy of sarcasm from you!

Doozergirl

NAR wrote:

OP stated "We also have a huge deposit and our mortgage in place, so we would have been able to complete within 28days as required."
I am taking that as fact, which is why I made my comment - hardly worthy of sarcasm from you!

There was no sarcasm in my post. I though your comment was flippant. Sorry if I upset you.

Cash is King. It's as simple as that. Just because someone gets outbid on a property, it doesn't mean that the EA is bent. I'm not an EA and have lost out on many properties myself, but it still grates me when people automatically jump to the conclusion that it's the fault of the EA. Someone is in massive debt over that property, so it's morally correct that the Mortgage company must find the best price/offer for that property as damage limitation for that debtor. That offer, unfortunately, belongs to someone else. No-ones fault, no dirty tricks, no 'mates rates' just someone else in a better position.