It doesn't make sense - Warning rant alert!

serious_saver

We put an offer on a property over the weekend as cash buyers. The property was a repossession.

There was another buyer interested and we know that they require a mortgage and only have a 10% deposit (the estate agent told us even though they shouldn't).

After putting in our offer the estate agent got back to us with a long list of information that the vendor (a well known high street bank) wanted us to provide to confirm that the cash funds were in place.

The other people haven't had to do this. They've just had to say "we will get a mortgage."

Everything they asked for, we provided immediately. We were even told that we had to contact our solicitor and get them to call the estate agent. Of course this cost us money.

So we received a call today. THEY ARE GOING WITH THE OTHER BUYER. They didn't give an explanation so I assumed it was because they have increased their offer. We made it very clear that it was our final offer and that we wouldn't be drawn into a bidding war.

Well I just went onto Rightmove and there is a notice from the estate agent saying they have accepted an offer for the exact same amount that we offered!!!

I genuinely can't think of one good reason why they would accept their offer over ours. Everything is in place and we are in a position where we could exchange and complete tomorrow if necessary. We have a very good solicitor who is prepared to clear space in thier diary for whatever day we need.

I thought the bank was legally obliged to get the best deal they can so how can it be a better deal if they have to wait for another buyer to get everything into place?

GAH

You don't know if another cash buyer didn't come in and make that offer.

If you really want it, you could always raise your offer and see if that is accepted.

If not, theres plenty more property out there.

serious_saver

GAH wrote: »

You don't know if another cash buyer didn't come in and make that offer.

If you really want it, you could always raise your offer and see if that is accepted.

If not, theres plenty more property out there.

Thanks for the suggestion. Unfortunately because of the work that needs doing I won't be going up. The price we offered was the right price for that property.

I know that they accepted the other offer because I have spoken to the estate agents and he has said that he can't understand the decision either, given that they require a mortgage.

Alas, where I'm looking there really isn't a lot of property out there. However we will pick ourselves up and keep looking.

My father is a retired surveyor and when he looked at it he said the house would be lucky to pass a survey for a mortgage so who knows what will happen. Anyway the whole things is very odd!!

jimpix12

Maybe they preferred the other people for some reason? Or could it be a ruse to get you to go higher?

As a cash buyer I haven't had much luck convincing vendors I am in a better position than mortgage/chain. They don't seem to care.

celyn90

It might be that the displayed offer is the first offer - not the actual one; sometimes notice is only given once.

We bought a repo with a mortgage, it was as quick as anyone could have been (slow step was the searches). We were under a lot of pressure from the EA to take their brokering and legal services though and we had to provide an awful lot of information to them (again, this was probably more to do with selling services but they claimed they had to vet us as proceedable before they would take the offer); so you don't really know what the other buyers had to produce.

You could always ring the bank and ask them directly why the other buyer was favoured over you.

Gromitt

If the bank is the vendor it could be something as simple as the other buyer has agreed to take out a mortgage with that same bank. You would still think they would prefer a cash sale (no chance of defaulting) but maybe they are thinking of making another £20K in mortgage interest charges on top of the sale price.

ognum

Gromitt wrote: »

If the bank is the vendor it could be something as simple as the other buyer has agreed to take out a mortgage with that same bank. You would still think they would prefer a cash sale (no chance of defaulting) but maybe they are thinking of making another £20K in mortgage interest charges on top of the sale price.

I have been a cash buyer many times but when selling I wuld always prefer a mortgaged buyer over a cash buyer

It is easy foer cash buyers to back out at any time! If you have a mortgaged buyer it is much moe hassle for them to pull out and re arrange mortgages

So I would pick the motgaged buyer Sorry!

JQ.

ognum wrote: »

I have been a cash buyer many times but when selling I wuld always prefer a mortgaged buyer over a cash buyer

It is easy foer cash buyers to back out at any time! If you have a mortgaged buyer it is much moe hassle for them to pull out and re arrange mortgages

So I would pick the motgaged buyer Sorry!

This ^^^^

Cash buyers offering on Repo's are exactly the kind of people who pull out at the last minute or put in a last minute chip in the price. I've a friend who regularly bids on up to 5 Repos at a time but will only actually complete on one.

The_Mac_Attack

I have worked as an EA, all be it briefly. The company I worked for regularly steered vendors away from cash buyers for the exact reasons given by the above two posts.

Honest_EA

celyn90 wrote: »

It might be that the displayed offer is the first offer - not the actual one; sometimes notice is only given once.

This is the likely answer to your query although not exactly as stated above. My business sells alot of repos so I know the requirements of different lenders/asset management companies. Most of them simply require you to run a public notice in the paper with the first offer that has been accepted. This starts the clock as such and gives other potential purchasers a chance to make an offer up until exchange of contracts. My guess is that the EA put forward your offer and it was probably accepted by the repo company who asked for the public notice to be placed on rightmove and in the local newspaper. The EA then had an obligation to tell any other interested parties and in this case the other party made a higher offer above your stated final offer which was accepted and now they are proceeding with the purchase. You told them you weren't going any higher so can't blame them if you were beaten by a higher offer.

One other point - if 2 offers are identical, no one has the upper hand depending on if they are cash buyers or require a mortgage. The highest offer gets accepted in all cases as long as you have been verified as proceedable. I don't buy all this nonsense about people preferring mortgage buyers. If someone can prove they can buy a house outright with cash then I'll let them stay in my house and wear my dressing gown while eating pringles in bed if it makes them happy because I know there is less chance of the sale falling through. Banks are undervaluing properties at the drop of a hat so the likelihood is the mortgage buyer may be turned down by the lender after applying for the mortgage. No problems if paying by cash.

ognum

Honest_EA wrote: »

This is the likely answer to your query although not exactly as stated above. My business sells alot of repos so I know the requirements of different lenders/asset management companies. Most of them simply require you to run a public notice in the paper with the first offer that has been accepted. This starts the clock as such and gives other potential purchasers a chance to make an offer up until exchange of contracts. My guess is that the EA put forward your offer and it was probably accepted by the repo company who asked for the public notice to be placed on rightmove and in the local newspaper. The EA then had an obligation to tell any other interested parties and in this case the other party made a higher offer above your stated final offer which was accepted and now they are proceeding with the purchase. You told them you weren't going any higher so can't blame them if you were beaten by a higher offer.

One other point - if 2 offers are identical, no one has the upper hand depending on if they are cash buyers or require a mortgage. The highest offer gets accepted in all cases as long as you have been verified as proceedable. I don't buy all this nonsense about people preferring mortgage buyers. If someone can prove they can buy a house outright with cash then I'll let them stay in my house and wear my dressing gown while eating pringles in bed if it makes them happy because I know there is less chance of the sale falling through. Banks are undervaluing properties at the drop of a hat so the likelihood is the mortgage buyer may be turned down by the lender after applying for the mortgage. No problems if paying by cash.

Well honestEA you are entitled to your opiniom but in my experience and I have just suffered at the hands of a cash buyer dropping out and have experience of this with other sales

Cash buyers have no vested interest the mortgaged buyer has to work to get the mortgage deal/find a good one/ are worried if they drop out they wont get one on the next property so are more commited and less able to at a whim move on to another property

I will accept it is what you have found but it doesnt hold true in my experience