Help - first time buyer - ready to exchange and trustee in bankruptcy hike the price

bouncing_bubbles

HI

Il try and keep this brief, but may not be sucessful.

Im a first time buyer, and am now a little confussed.
In August I put offer in on a house - was accepted :beer:.
Had mortgage agreed before I started looking for houses, so knew what I could afford and that there would be no issues futher down the line.

I had the property surveyed, instructed solictors etc etc.

However progress was slow - very slow, i started getting involved in November - and progress was made. my solictor called me into sign contracts :beer::beer: i transfered deposit and paid his bill - he never mentioned that house was part of bankruptcy order. I started purching things for house (all in sales, beds, sofas etc including new kitchen units, all i need is a washing machine & freezer). More delays followed.

While getting inviolved and contacting estate agent & trustee daily it came to light home owner had been made bankrupt in Apr 11, and had put house on market in July 11 and trustee was dealing with sale of house, trustee agreed to sale as house was at point of being reprocessed when i put offer in, - nievly this reassured me as I thought he would have checked the figs and done his job properly etc etc.

However after speaking to Trustee (I used my initave as estate agents were usless) things started moving again - or so I thought. Redemption figs were chased and eventually recived. I raised my 'concern' that trustee hadnt been doing his job More delays, more excuse and more c**kups followed.

Long story short was called by the estate agent last night and they want me to increase my offer - the lady whos being made bankrupt wont sign papers to relaese house. I feel so annoyed, fustrated and disheartened.

Ive been loosing £70 per month interest on savings.

Now im not sure what to do - house will be a good price (even if I increase my offer - but need confirmed figs but will be in region of 5K - or so ive been told) house needs a tonne of work doing to it, inc new windows, new porch, new facias & guttering, new kitchen units, complete redecoration, artex taken off walls and celling, new stairs (to loft converstion that was done with out pp & isnt to building regs - does have an imdemnity on it) some roof tiles need re pointing and the flat roofs need checking.

Now im not to sure what to do? Any ideas anybody?

BitterAndTwisted

You're contemplating all that work and you're a first-time buyer? I suspect that your proactivity in this purchase has been interpreted as mad keenness and you're now being played like a fiddle. Only you know whether this gaff is worth another five grand to you or not. I'd offer them two,

bouncing_bubbles

My dad used to convert barns and i like a challenge.
house was marketed by 2 agents for £170k - we agreed £146k - agents admitted house isnt worth £170k. House was viewed by 6 people in the 2 months, a house sold on same street 2 months ago for £179,950 and needs a small amouth of updating.
Thats my suspision - they think im a mad kneen first time buyer and they are trying their luck and to pull the wool over my eyes.
I have a suspision that they wont accept an offer midway.
I also think if its reposssed (as bank will do if sale doesnt go through) they will sell for less.
Mortgage outstanding on house exceeds my offer and the agreed sale price.
I have made it clear to estate agents and trustee that i think they are unprofessional and useless at their jobs.

Yorkie1

Was your mortgage valuation at the price you're purchasing it at? That's quite a strong bargaining tool if so.

bouncing_bubbles

Mortgage came with valuation - which i wasnt party to due to location, age of house, etc i got a survey that didnt detail value of house - i was thinking of going back to surveyer and asking for valuation - can i do that?

dimbo61

Tell them you wont pay one penny more than the price you have offered and will pull out of the deal if any delays.
Its a buyers market and everyone is messing you about.
Lots of work to do and you will need dad,s help.
Lots of houses on the market keep to sell with less work to do

bouncing_bubbles

I was thinking that. Its been going on for so long - I though they would bite my hand off. EA has tried to tell me that house prices are rising etc - ive told her thats a load of tosh.

My mortgage offer runs out end of jan.

Dads recently retired - so I need something for him to do to keep him out of trouble

Thanks

dimbo61

Get him an old motorbike( in bits!!!) or take up jumping out of a plane.

G_M

You have been naive - but that is understandable as you are a FTB.

Buying things for a house before you Exchange Contracts is madness. As you have found out, until then nothing is certain.

Your mortgage offer will (should) include the mortgage lender's valuation for the property, as well as the 'rebuild' value, which is the amount of buildings insurance you will need. If you don't have these, ask for them.

I too would not increase your offer - either you are being bluffed, so don't blink and bluff them back or
They've decided they must get enough o pay off the existing mortgage , in which case there's no compromise or
they have (or hope to get) another buyer, in which case you'll end up in a bidding war.

as you say, if they lose this sale, the proerty will be repossesed and their bank will sell it fast and cheap - maybe via auction maybe via an estate agent. If this happens, keep your eyes open, do some detective work, and pick it up even cheaper than your current offer!

poppy10_2

Yep, tell them you will pull out rather than raise your price. They won't want to lose a serious buyer, there's hardly anyone buying out there, and if they hold out for more they could end up with nothing. Don't blink first.

silvercar

I have a suspision that they wont accept an offer midway.
I also think if its reposssed (as bank will do if sale doesnt go through) they will sell for less.
Mortgage outstanding on house exceeds my offer and the agreed sale price.

I think there is some confusion here between repossession and bankruptcy.

If the property hasn't been repossessed then the lender has to agree to the sale. If the sale price is not enough to clear the mortgage then the lender may be reluctant to do so, especially as the borrower is bankrupt so the shortfall will be part of the bankruptcy and unrecoverable.

If the property did get repossessed, then the lender will sell for the max price they can get.

The "owner" really has no financial interest in the sale. Whatever happens they get no money from it. If there was anything left over after the mortgage is cleared it would go to the official receiver. Given that there is a shortfall on the mortgage and the borrower is bankrupt, there is little point in them paying the mortgage at present. So they are probably living there paying no mortgage. So their interest is to stay there as long as possible or at least until they have lined up a decent rental.

So who has got an interest in getting this sale sold?

Not the "owner" as explained above.
Not the Official Receiver as there is no equity in the property.
The lender should be wanting the sale to proceed because they will get more of the mortgage cleared by a regular sale than a repossession sale, and less hassle for them. The problem is that the various parts of the mortgage company need to coordinate. Unless they realise that the owner is bankrupt and that there is a shortfall and repossession is imminent, they may have a 'computer says no' position on selling below the value of the mortgage.