Voluntary repossession - what does it mean for a prospective buyer?

pauli71

My partner and I are first-time buyers, and are currently renting. Towards the end of August we put in an offer on a house and it was accepted. The couple who were selling were in the process of separating, and had moved out of the property earlier in the summer.

After that things dragged a little bit - partly because we were unsure of the process, and partly because the survey threw up some concerns that we wanted to investigate. But by the end of October we were pretty much ready to exchange contracts. During the intervening weeks we'd seen no evidence of urgency from the sellers; in fact they'd been oddly slow in answering our queries.

Then a couple of weeks ago our solicitor phoned to say that there was a problem with the sellers' mortgage, and that everything was on hold. Several days passed, and our solicitor was unable to find out any more information. We heard that the seller woman had been in touch with the estate agent to find out why we hadn't exchanged; apparently she was unaware of any problem.

Today we received a phone call from the estate agent to say that the sellers had decided to seek voluntary repossession. Again, he was unable to tell us why, except to say that the sellers' lender was not a high-street operator. The implication was that it was a rather irregular arrangement - but we have no detail to go on.

We feel very confused by the whole process - in particular, why the sellers would opt for repossession when they had a buyer poised on the verge of exchanging. If they were in financial difficulty why didn't they ask their solicitor to hurry things along? I'm unsure where we stand, and whether it's worth us persisting with our interest in the property.

Any thoughts would be much appreciated.

Yours confusedly
Paul

kinglewis

I bet the amount they sold the house for didn't cover the debt in full. Therefore it had to be repossessed (If it was in arrears).

The seller would not want to admit this due to being embarrassed..(and doesn't have to tell you or your solicitor due to data protection) or may just have simply not understood the maths! (Sometimes people forget about sols fees / EA fees etc and if the sale price doesn't cover this plus the mortgage amount it has to be repossessed if it was on the verge of repossession anyway)

You should go on to get the house for a lower price I would have thought!! (once it is marketed on the open market)

_bankrupted

Ask the seller for details of their lender and with permission contact the lender to explain the situation.

Obviously this is in the interests of all parties, otherwise place a bid for the property once the lender places it for sale (at a lower price).

pauli71

Many thanks for the advice. Our solicitor has asked permission to speak to their lenders, so we're just waiting to hear back...

silvercar

A lender should still allow the voluntary repossession to proceed, after all it maximises their return and limits their costs. They will still chase the sellers for the difference, but that is out of the equation.

The only thing that would delay a voluntary repossession is if the lender wanted to be satisified that the were getting the best price they could for the sale.