Repo experts please help me !

Uk_Lover

Hello

Need to pick the brains of people with experience of buying repos.
I’ve put an offer in for a flat, huge conversion in lovely Victorian house that’s been on the market for about 4 weeks, no offers. It’s on at £89995. It has 66 years left on lease and it will cost me about £12000 to extend to 99 years. There are about £5000 worth of repairs needed per flat for the outside and it needs decorating, new kitchen, new bathroom and possibly a new boiler as I can not check. I can do the work for about £5000ish. Looking at recent sales they normally sell for between £120000 & £130000. So if I paid the asking price it would be about £112000 + buying and selling costs so potential £8000 to £18000 profit.

So this morning I called the estate agent and made a cheeky offer of £75000. I explained my workings and he seemed to agree that at the guide price there was not that much money in the flat as I plan to sell after 6 months once my contract is up (working away from my home 5 days a week).
He said he would put the offer to the seller (I guess a bank) and call me back. Tonight he rang and said something I’m not familiar with for buying repos. He said someone else had bid this morning and the seller wanted to know our highest bid and he was asking the other bidder the same (wouldn’t tell me their bid but guess it must have been near mine). I might be being stupid but my understanding of buying repo is you make an offer it gets advertised and anyone else who wants to bid can do before completion?

Now I’ve read loads on here and I’ve seen quite a few people mentioning ‘mystery bidders’, better known as scumbag EA who are trying to get more commission.
Does this sound like one of them or have I got it all wrong ?
So the big question is, do I stick or twist ?

Calling his bluff and sticking to my offer is what I think as I thought if I get out bid I will see their bid and can counter it if within my budget. I could increase it but could be just paying for the EA new suits !

Sorry for waffling so much, I got there in the end lol but I’ve got until tomorrow morning to make a decision.

Cheers

ognum

I think you are right, there may or may not be another buyer but you have done your financials and your bid is what you are happy with.

Most repos are not taken off the market until exchange so if you win you have the risk of being out bid and so does any other purchaser.

Richard_Webster

Assume you are not wanting a mortgage on it as some lenders won't look at it with only 66 years left.

Caleb11

Yes stick to your offer & see what happens. You'll be able to see If ur outbid then act rather than tell estate agent how far your going to go then suddenly another bid as came in

cattie

It's very unlikely any EA will try to get a potential buyer to bid higher just to increase their commission, for it would literally amount to peanuts. So to my mind, to think such a practice is going on here is pretty daft. They would be lucky if any extra commission bought them lunch in the local fish & chip shop, so a long way from the new suit you are imagining for them. A button on the new suit maybe!

The bank is obliged to achieve the highest price possible for the property, so nothing amiss in asking prospective buyers what their highest bid is.

Don't forget too that a bank will quite often go with the most proceedable bidder, even if it's slightly lower than a higher bid, just to be able to realise the money tied up in the property, so very often cash is king here.

With a 66yr lease, it is going to have limited interest for many buyers, other than those who have the cash to buy outright. Plus having to fork out £5k for external repairs will put a lot of people off. If the building needs that much work, then obviously it isn't very well maintained by the freeholder.

Uk_Lover

thanks for the reply's
I'm buying with cash and can move in 14 days so can't see the other 'bidder' being in a better position. Maybe the problem is I originally offered £78k but he forgot to tell me about the work needed so I dropped to £75k so I know he knows I can afford more. I've read quite a few stories on here about mystery bidders so am being a bit more careful as it's hard times and you really don't know if the Ea is being pressured by their bosses with sales targets etc

There are 3 flats and they have balcony's which are in need of a bit of TLC, the front needs painting, bit of rendering needed etc, it's not major work but he said it would be a max of 5k but maybe less. It's a beautiful property and will only help sell later on so not worried.
Think i'm going to call him in the morning and ask him why this sale is not going down the normal repo route and hold my nerve and if necessary walk away. Will go to 80 as it will be my home for a while and I know I wont lose but will stay with my bid and see what price gets advertised.
Plenty of other places about but I do like this place !
thanks

Uk_Lover

Quick update.Just spoken to the EA and told him I know all the rules of repos and that my first offer still stands. I did say I may be prepared to up it but would depend on what the other offer is. He's going to ring me later and tell me the outcome. He did say that they are not offering viewings to anyone else unless they ask directly about it so now know he's a bit sneaky which could be a good thing if I'm the only bidder. Once a bid comes in, how long does it normally take for that to become public? Seems a bit stupid if he wont tell me their price when it will be public very soon. Now the waiting game starts !! fingers crossed

gwernybwch

Uk_Lover wrote: »

I did say I may be prepared to up it but would depend on what the other offer is.

Cue EA phoning you back and saying that the other offer is [insert figure here] above yours, but the seller prefers to deal with a cash buyer, therefore all you have to do match the other offer and the flat is yours.........

paddyrg

Thought - if it's owned by a bank, will they offer you a mortgage with the 66yrs as it still gets it off their hands

maryroberts

In answer to your question - the Public Notice (in our case) appeared 3 days after our offer was accepted, on Rightmove and the Agents website. We were fortunate that no-one else came forward with a higher offer, and we exchanged contracts bang on 2 weeks later and received the keys 3 weeks to the day after first viewing! Hope you are lucky with your purchase too.

Uk_Lover

gwernybwch wrote: »

Cue EA phoning you back and saying that the other offer is [insert figure here] above yours, but the seller prefers to deal with a cash buyer, therefore all you have to do match the other offer and the flat is yours.........

I got a slap round the head for saying that off the missus, classic mistake but I'd just got back from a meeting in the pub and was a bit inebriated, lol . the guy knows I've got more money especially as I originally offered more plus he showed us around a few other more expensive flats. Still waiting so they must be thinking about it !cheers