Can a bank repossess a property after exchange of contracts?

bijal_2

Hi Madmish00, I was wondering what the outcome of your situation was? I find myself in a similar position, where the seller was given a court order to sell by a certain date, so the house was put on auction, where we picked it up. But now the redemption figures dont match up, leaving us in limbo!

Alter_ego

chappers wrote: »

The OPs solicitor is right to want clarification both from the point of veiw of potential repossesion after completion and as to whether the sale is likely to complete in the first place.

Surely there cannot be repo after completion?

ab7167

GDB2222 wrote: »

The bank can't repossess after completion, because it will be a condition of completion that the mortgage is paid off in full.

The real problem the OP faces is that he pays his 10% deposit, but then the seller can't complete. You'd think his deposit would be safe, but under the standard contract terms, the seller can use the deposit as his own deposit if he is buying somewhere else, so the OP could lose his deposit as well as not getting the property.

With regard to the deposit, there is a box you can tick to say that you do not consent to the deposit being passed up the chain. We were in this position last year and our solicitor advised that we did not allow our vendor to use the deposit going forward. We simply couldn't risk our deposit disappearing between exchange and completion, especially as the vendor had requested a month gap. I think they were up to something dodgy, or knew something we didn't... In the event, the bank refused to agree to sell to us at a price we were willing to pay as they were in significant negative equity. It was repossessed eventually and sold for £60k below what we had offered. We found a better and cheaper house elsewhere!

GDB2222

ab7167 wrote: »

With regard to the deposit, there is a box you can tick to say that you do not consent to the deposit being passed up the chain. We were in this position last year and our solicitor advised that we did not allow our vendor to use the deposit going forward. We simply couldn't risk our deposit disappearing between exchange and completion, especially as the vendor had requested a month gap. I think they were up to something dodgy, or knew something we didn't... In the event, the bank refused to agree to sell to us at a price we were willing to pay as they were in significant negative equity. It was repossessed eventually and sold for £60k below what we had offered. We found a better and cheaper house elsewhere!

Interesting that the bank would not allow the vendor to sell at that price but only achieved much less later on after repossession. Some jobs-worth at work.

All contract terms are negotiable, of course, so yes you can refuse to allow our vendor to use your deposit for their purchase. However, the majority of chains do absolutely rely on the deposit being passed up the chain like that.

ab7167

GDB2222 wrote: »

Interesting that the bank would not allow the vendor to sell at that price but only achieved much less later on after repossession. Some jobs-worth at work.

All contract terms are negotiable, of course, so yes you can refuse to allow our vendor to use your deposit for their purchase. However, the majority of chains do absolutely rely on the deposit being passed up the chain like that.

In the majority of chains there is not the very real possibility of the deposit vanishing into thin air! This whole attempted purchase stank like last weeks fish to me, the EA were hiding things, the vendor was hiding things, there was an insolvency practitioner and 2 charges on the property - I am very glad we walked and didn't try to get to the bottom of why our offer wasnt good enough...