Repossessed property. How does it work?

loujay_2

Hi,
Weve viewed a house today that turned out to be repossessed. We were then told that an offer had been made of the full asking price (which was cheap) and that it was in todays paper serving the 7 day notice. We decided to put an offer in too so visited the estate agents to ask what the process was. He couldnt seem to make his mind up if our offer had to be a best and final offer or whether we could go in a bit higher. then he would contact the other bidder to increase their offer if they wish, then he said he'd come back to us. I feel awful as the other bidder has had the property surveyed today but we really want it too. The estate agent says we need to complete and exchange in 28 days which we think could be possible. Our house is at the searches stage so fingers crossed it will go... dare I say it smoothly now!!!
We were thinking of going £5k over the other bidders price but could go a bit higher without paying more than the house is worth. Has anyone been through this process and if so what would you advise and what is the actual process. The estate agent kept changing his mind.
Thanks for any advice.

Doozergirl

The mortgage company are obliged to get the best price for the property, therefore the person currently trying to buy should be well aware that offers will be invited until exchange so there's a good chance of getting gazumped.

You put in your offer and this should be confirmed in writing by the estate agent. The mortgage company will want to verify your offer properly and you will NEED to have your mortgage decision in principle ready in order to do this.

They will invite offers from the other party and you will keep going until one of you drops out. It's a hell of a game, but what I wouldn't do is increase your offers in too high increments so that you still get the best price available if the other party does drop out. What is likely is that the EA will invite best and final offers, but in reality they can't really do this because of their obligation to obtain the highest price. You can therefore still go back with a higher offer.

The most infuriating thing that has ever been done to us at best and final was that the other party's best and final offer was "£500 more than any other offer". A real annoyance for us, but it worked for them.

claireandella

I was in this position a couple of years ago. As far as I could make out it was the Building Society carrying out the reposession who decided which process to follow. In our case the other buyers were accepted subject to a seven-day notice in the paper and any other interested parties had to submit their offers by noon on the last day. As there were several interested people the agent then came back and asked for best and final offers by the following Friday. I have also been involved in this process where the sale was on behalf of the Executor's of a will.

I believe that, where the seller has a (moral?) duty to maximise the profit (ie the Executor's must get the maximum for an estate as tax may be payable and a Mortgage company must get the maximum for their defaulting client as they may be entitled to any excess after the debt is covered) the notice period and best and final offers process is probably the fairest way, other than auctioning the property. It's a horrible process for the buyers though as it is really uncertain and however do you decide how much to pay? We ended up adding 10% plus a bit! Not very scientific but at least we got it (and felt it was a bargain)

Good Luck!

loujay_2

Thanks for your replies. We are going to go to the bank in the morning to get a mortgage offer. We already had one but I think they only last 3 months??? Then we are going to the estate agents and we are going to ask him again is it best and final offer or is it offers, more offers and more offers. If he wont give us a straight answer we are going to ask him to find out from the building society. We had asked the lady who shown us round the house to find out the proceedure which she did but when she tried to tell us what the building society had said the EA man sort of took over the conversation and we never got the proper answer.
Fingers crossed and thanks for your replies.

Tassotti

Another thing to consider is the solicitor you use if you are the winning bidder.

You need one that is on the ball and complete in 28 days. I often complete on a purchase within this timeframe, and it is all down to my excellent solicitor/broker.

Tass

emg

I'm in the process of buying a repo at the moment and agree that the EAs have made me well aware that I could be gazumped right up until the last minute (bearing in mind that they have to keep marketing the property right up until completion). However, although they have to accept the 'best offer', I was told that this isnt always necessarily the highest offer as the repo company will also look at the circumstances, chains and potential timescales of each offer.

I was also told that I needed to complete in 28 days - that was a month ago today! It's the selling solicitor holding things up as they are struggling to get all the information (it's leasehold and it's taken them weeks to get hold of a copy of the lease and they still havent forwarded it to my solicitor).

I'd be interested to know how other people have got on with buying repossessions.

Debt_Free_Chick

loujay wrote:

The estate agent says we need to complete and exchange in 28 days which we think could be possible.

Local Authority searches in some areas are taking weeks.

This is a very, very ambitious timetable

If you are also selling, then you need to be sure that your buyers can commit to this timetable too.

loujay_2

Thanks everyone.
We put our offer in today but after reading your replies, I really hope we are doing the right thing. I never realised that someone else could come along and gazump you right up until exchange. Im not sure we are prepared to lose survey and solicitors fees too. It seems a rough ride and I thought if our offer was accepted then after 7 days with no further offers it would be ours providing we completed within the 28 days. The EA seems to think the searches on our house should be well underway and says they take about 2 weeks. Im beginning to doubt this now.
I will ring our EA who is dealing with both my sale and my buyers sale on Monday and see what they have to say.
Thanks for all your advice:T

Doozergirl

loujay, the fact you are in a chain would make me worry. The fact is, you're at the mercy of others, regardless of your intentions to complete within the timeframe given.

I'm not entirely sure what the mortgage company would do if you missed their 28 days window; not much probably, but the longer the house is marketed the more opportunity there is for another buyer to jump in.

The fact you are in a chain will go against you as well when they make their decision.

flea72

its a complete nightmare buying a repossessed house. honestly until you have exchanged contracts, you will not get any sleep, as theres always the risk someone will come along and gazump you

we went through the best and final offer process and were told we werent the highest bidder. i rang up the estate agent, offered more money and low and behold we were now in the running again. seems the word FINAL doesnt ever come into play, just BEST

the house wont be taken off the market, and most estate agencies are asked to really push the properties once an offer has been made and accepted, as this then creates more interest, as like you, alot of people think 'wow that house is going cheap', when previously they hadnt shown any interest, and they can then try and get a better price for the property.

Unless you have nerves of steel, and are prepared to hound your conveyancer every day to get the paperwork moving, so you at least stand a chance of getting it through before someone else can join the bidding war - then i would just walk away.

house moving is stressful at the best of times, but repossessions are worse. and thats just the start of things. once you are moved in, you usually get lots of junk mail and baliffs turning up for the previous owners, plus getting credit can be a problem too in the early days, as the address has been blacklisted.

Flea

Tassotti

The best way is to buy properties that are about to be repossessed. Finding them is the skillful part. Mucho wonga to be made doing it this way.

Tass