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

Uk_Lover

I think I'd call their bluff. Tell them your offer is your offer and you will not increases one penny. Yes you have spent money on surveys but I guess it hasn't cost you £5000. Personally I'd tell them it all has to be sorted by 'insert date' otherwise you will walk. If you walk it sounds like the house will be repossessed anyway and you may be able to pick up a bargain.
That is unless you have fallen in love with the house and want it so bad you cant afford to lose it !

pinkshoes

Why not tell the EA that you are not willing to raise your offer, then find another property on the EAs books and ask to view it? That way it'll show you're not 100% fixed on getting this property, and will hopefully make them see sense.

bouncing_bubbles

Thanks for all your replies.

G_M: Everything I have (except kitchen units) i will need when I get another hosue so Its not to bad - just wont be used as quickly as I would have liked.
I will ask them for the vaule of property.
I dont think there is anyone else interseted one EA stopped advertising it and the other has it SSTC - if someone else has put another offer in why havnt they told me?

Silvercar:
Its a bit confussing for me. Communication from EA & trustee has been poor. I have asked repetidaly for clarity but the left hand doesnt seem to know what the right hand is doing. I have called teh EA twice this am and nothing.
But as I understand it - the lady was made bankrupt due to a failling business in Apr 11. The property was a buy to let - been let out for years and was rented to chef of her pub (which was made bankrupt).

Until July tennants were in the property Im not sure if mortgage was being repaid or not. Anyway proprty was put on market in July by the lady who is being made bankrupt - the bank were about to reposses the property when I put the offer in. The trustee and this point decided he wanted house as part of the bankruptcy and her accepted the offer (without getting or checking redemption figs). Thus the repossesion was stopped.

The EA has informed me that the owner was sent a form from her bank to complete (a shortfall questionnaire) but she hasnt and wont.

Does this make sence to you? or are they trying iot on again?

UK lover - its cost me around £1600, dont madly love the property (my dream house is in the middle of a field, with my horses in my garden - so a while away), but it a very nice house, woudl have good resale value when done up and would be easily rented out. Long trem I planned to do it up - save for a nother deposit and have it as a rental property.

PinkShoes - thats such a good idea but I have already informed the EA (due to their lack of communication) that on a matter of principle I would never even look at a house on their books again.

Thanks again everyone x

DVardysShadow

bouncing_bubbles wrote: »

... 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.

....

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

As G_M says, buying stuff was not a good idea. And if any of Agent, Seller's solicitor, Trustee in Bankruptcy, Lender got wind of the fact or extent to which you were doing this, what is now happening is entirely predictable. They would see that you are so committed to the property that they can take you for several grand more.

When you make a loss, it is best to face it. Have a look through the stuff you have bought and work out which will be no use if you don't have this property. Value it and mark all the packing with large red cross. This is your loss right now, together with your fees so far.

If 5K is worthwhile to prevent that loss, then pay the extra. Or any lesser amount, offer that. Otherwise, or if your offer is rejected, walk away. Or if you like a gamble, just walk away. Don't hold your breath, but they could come back to you.

To walk away, I would say something like "I can't afford £5k, my mortgage runs out at the end of the month, and I don't have the energy to get the mortgage changed, exchange and move in by the end of the month, I am instructing my solicitor to return papers."

bouncing_bubbles

Thanks - DVardysShadow

Like ive said everything I've got I will need for any house (expect kitchen units-but they were 75% off and came to about £400 - they are solid oak so should be able to break even with selling them)- Ive live with rents- ecpect a nine months when I moved away for work but rented fully furnished.

EA knows about units as i took them round to ensure they fitted.

EA also know I can afford more - I was looking at houses for a fair wack more.

Hence my suspision that they are trying to con me.

i may well use that phrase.

bouncing_bubbles

Ok just had am email of EA - MRS xxxx has sought legal advice and will not complete as they do not want to be liable for the shortfall.

when questioned further
I would imagine that the XXXXX want to wash their hands of it.

If you pull out a repossession would be inevitable. It would then be valued by three estate agents in due course and more than likely go back on the market for £155,000 ish. My bet is the property would potentially resell at about the £150,000 mark and in fact we have a few buyers who would gladly pay that for it.

:mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad:
Now i suspect this is 'sales talk' - if they were that interested they would have offered the extra money in July/Aug. I have asked for clarity.

What i dont understand is why they accepted my offer? or tell me before Christmas?

silvercar

Silvercar:
Its a bit confussing for me. Communication from EA & trustee has been poor. I have asked repetidaly for clarity but the left hand doesnt seem to know what the right hand is doing. I have called teh EA twice this am and nothing.
But as I understand it - the lady was made bankrupt due to a failling business in Apr 11. The property was a buy to let - been let out for years and was rented to chef of her pub (which was made bankrupt).

Until July tennants were in the property Im not sure if mortgage was being repaid or not. Anyway proprty was put on market in July by the lady who is being made bankrupt - the bank were about to reposses the property when I put the offer in. The trustee and this point decided he wanted house as part of the bankruptcy and her accepted the offer (without getting or checking redemption figs). Thus the repossesion was stopped.

The EA has informed me that the owner was sent a form from her bank to complete (a shortfall questionnaire) but she hasnt and wont.

Does this make sence to you? or are they trying iot on again?

Sort of makes sense. As the property was let, in bankruptcy the official receiver would pass it on to a trustee to deal with. That would explain a delay. Once the trustee realises that the mortgage is bigger than the property value their enthusiasm wanes - there is no money to recoup. They then have three options, to keep hold of it in the hope that prices rise, give it back to the bankrupt or to let it be repossessed. If the property was tenanted there is money coming in to the trustees, though it doesn't have to be used to pay the mortgage. Once the property is empty, the trustee needs to make a decision on what to do. They can declare they have no interest in it and give the beneficial interest back to the bankrupt.

If the bankrupt has been given the BI back, the bankrupt needs to decide whether to sell it, keep it or give it up. I suspect the seller(= bankrupt) is hoping there will be something left over after the mortgage is cleared and that is why they are delaying.

From the sellers point of view they can allow it to be repossessed and walk away knowing the shortfall is included in the bankruptcy or they can keep it in the hope that they can sell it for more money than the mortgage and keep some cash.

If you are sure that the seller is still involved with the sale (and I am surprised by this) then I suspect that they have been given it back by the trustee. If they have been given a letter from the lender about the shortfall then the lender is considering allowing the sale to proceed without the mortgage being cleared. What puzzles me is why the bankrupt seller would be bothered by all this - any shortfall falls into the bankrupt, so why be involved in the sale rather than walking away?

One further thought, it could be that the seller hopes to salvage some money from this and is trying to delay exchange/ completion until they are no longer bankrupt. Provided they have done nothing dodgy their bankruptcy ends after a year, less if they are discharged earlier. So that is what the delays could be. Also, if they have little disposable income (likely after a failed business) then the official receiver won't be interested in any money they get after discharge. I think technically they have to notify the OR within 21 days of a change in financial circumstances. So they could be trying to delay everything until they are discharged early or 21 days before their automatic discharge date.

This is all supposition based on what you have said. TBH the EA has and has given you far more information than they should have. I wouldn't be surprised if the seller is spinning them a line and everything is not quite as it seems.

silvercar

bouncing_bubbles wrote: »

Ok just had am email of EA - MRS xxxx has sought legal advice and will not complete as they do not want to be liable for the shortfall.

when questioned further
I would imagine that the XXXXX want to wash their hands of it.

If you pull out a repossession would be inevitable. It would then be valued by three estate agents in due course and more than likely go back on the market for £155,000 ish. My bet is the property would potentially resell at about the £150,000 mark and in fact we have a few buyers who would gladly pay that for it.

:mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad:
Now i suspect this is 'sales talk' - if they were that interested they would have offered the extra money in July/Aug. I have asked for clarity.

What i dont understand is why they accepted my offer? or tell me before Christmas?

What I suspect has happened is that the lender has refused to allow the sale to proceed unless the seller signs acknowledging liability for the shortfall. The seller has been advised not to do so. This is because signing now would mean they become liable, not signing means that the shortfall falls into the bankruptcy - even though the sale is after the bankruptcy, the shortfall isn't (or not deemed to be).

So the seller has been rightly advised not to sign anything acknowledging liability for the debt so the only way the sale can proceed is for either the seller to be able and willing to make up the shortfall or for the buying price to match the amount owed.

In repossession, the lender controls the sale and the seller doesn't acknowledge the debt. Any shortfall falls into bankruptcy. It can mean less for the lender, but the lender seems to have now stated their position, the seller been legally advised and that is it.

As to your position, if the EA really had a few buyer s paying £150k, they would be sitting where you are now. It may be worth trying to contact the lender directly.

Professional

Agree with you Bubbles don't sweat over having bought the furniture, you're going to need that stuff anyway. Worst come worst you'll have to find somewhere to keep the lot until you buy.

In terms of the main property. I would say it's delay tactics. The bankrupt lady doesn't benefit from a sale, regardless of the price. She's just being difficult. She's no longer paying for the property be it mortgage or any other costs, so it's a free house practically. After a certain amount of time her debts will be written off. After this period if the home is not sold for 3 years there's a possibility she could hang on to it. Obviously this means several years without a sale which is unlikely and its her clutching on straws but in her position she has nothing to lose. I doubt an increased offer will work, but i'd suggest its worth a try. Put 3k on it and put the ball back into her court if she rejects it again then she could get in trouble if she has been ordered by a court to sell the property. If she accepts you've still got a good deal right? (that's your call based on the work that needs doing, do some sums!).

If she rejects and gets into trouble it could be a long process so i'd suggest you get searching again, if your mortgage runs out end of Jan i'd suggest you talk to your bank and make them aware of your situation and bad luck. This might help them understand why you might be re-applying for a mortgage after Jan (if they've approved you once, they will do it again).

Finally don't be too disheartened its just a bit of bad luck, FTB or not it could have happened to anyone. Good luck with getting on the ladder!

silvercar

What i dont understand is why they accepted my offer? or tell me before Christmas?

They didn't know.

The lender only recently insisted that the seller needs to sign for the shortfall.

The solicitor only recently gave advice on this point.

To be fair, this is all really quite new. BTL only took off in the last few years and the number of repossessions of "amateur" landlords has been small. The number of BTL landlords who have gone bankrupt is tiny. The rules on handling BTLs in bankruptcy have only very recently become established and consistent. Although treatment of shortfalls on mortgages in bankruptcy has been known for a while, this then has to be applied to commercial ventures like BTL....