House has been Repossessed 5 days before completion - ADVISE NEEDED!

james10999

HELP!!

I really need some advice!
Basically the house I am about to purchase was on the market for 9 months, and I finally put in an offer that the owner would accept (£136,000) for a 3 bedroomed end of terrace property. It needs a lot of work doing to it in terms of a brand new kitchen and major redecorating work (the house has artecs!).

The sale was going to exchanged and completed on the same day on Wednesday 25th July. I found out yesterday however that the house has now been repossessed by the bank and am waiting for further news. My solicitors or estate agents can't tell me any more at this stage.

What do I do?!

Do I now have to buy to house off the bank?

Where do I legally stand?

Can I offer less for the property?


Any help is greatly recieved as I'm a nervous reck as this is my first house purchase and have already given a months notice on my rented flat at the moment.

MOCB

1. If it has been repossessed, approach the bank (that repossessed it) about buying it.

2. If you have not exchanged contracts (and no other contract is in place) you can offer less. You may get the house for less, or they may sell to someone else - anything can happen.

3. Re your notice: you could speak to landlord and ask if he'll cancel your notice.

brickhouse

Something similar happened to me about ten years ago. I'd put in an offer on a property, then gone to my lender for a mortgage package, then it transpired that the vendor, who shared the same lender as I did, had arrears and could not, at the price we had agreed, pay the shortfall of the arrears. So his lender (also my lender) repossessed the house from him and I was equally helpless. The lender gave it to another local estate agent to sell and they were trying to get an extra £30,000 for it and said I could have it if I agreed to pay the extra. I told them to go whistle as there was no way the property could fetch that much.

A couple of months later, as I was quite advanced with another sale, having moved on, I got a call from someone acting on behalf of the lenders. I guess they are the ones that handle auctions and stuff. He wanted to know if I was still interested in buying this house (for which they had received no offer since remarketing it). I said yes, but offered slightly less than my original offer to teach them a lesson, and to recoup what I had spent on the purchase I was about pull out of. They agreed and the sale went ahead hitch-free.

If this property you are after has been on the market for nine months without a buyer, I don't see how they can get any more for it than you were prepared to pay. But I think they have a legal duty to try and get more which is why they don't do the common sense thing and sell it straight to you.

If I were you, I would make sure that whoever is disposing of this property is properly aware of your interest and what you are offering to pay. I would not offer less right now. But if they come back to you some months down the line with their tail between their legs, that would be when I'd offer less.

Good luck.

BrickHouse

mystic_trev

james10999 wrote: »

Can I offer less for the property?

Don't even think about it! The Bank is Duty bound to get the best price for the Property, so may well re-market it. I f you start playing silly bugg@rs now, you'll lose it.

MOCB

'If you start playing silly bugg@rs now you'll lose it.'

Maybe. Maybe not. I bet many people have offered less and been successful. All I am saying is it is risky, but the risk is not 100% that he'll lose the house.

Twopints

mystic_trev wrote: »

Don't even think about it! The Bank is Duty bound to get the best price for the Property, so may well re-market it. I f you start playing silly bugg@rs now, you'll lose it.

So the bank aren't playing silly !!!!!!s by repossessing a property less than a week before a sale was due to complete? Why should the buyer have to pay out more (in fees etc.) because the bank couldn't wait a week for their money?? Surely by the bank's actions everyone loses out.

[Deleted User]

Offer them 120K not a penny more. Like you say it needs work!

Its better to lose it then pay over teh odds for a house just as an impending price crash is about to occur youll need to pay for an additional survey on a new property but its better then getting ripped off by the bank.

My mate got ripped off to the tune of an additional 10K as the bank had let the owner remortgage it to more then what it was worth he was stupid and paid now he has a huge mortgage that only him AND his dad can afford, yep you heard me right he cant afford it by himself so his dad bails him out to the tune of £500 a month. There are just people that are bad with money I guess.

dunstonh

Twopints wrote: »

So the bank aren't playing silly !!!!!!s by repossessing a property less than a week before a sale was due to complete? Why should the buyer have to pay out more (in fees etc.) because the bank couldn't wait a week for their money?? Surely by the bank's actions everyone loses out.

The bank may not have been aware that the property had been sold when it started the repossession process. If the owner has been ignoring the bank (which happens an awful lot) there will be no reason for them to know that the owner had put it on the market.

silvercar

Some of the fault with this should lie with the owner. They should have informed the lender that a sale was iminent. In fact, I don't understand why their solicitor didn't contact the lender.

There is actually an arguement for saying the price should be reduced. You were previously buying it on the open market, now it should be priced for a quick sale.

The lender has a duty to obtain the best price, so they should take a view on how quickly it will sell and price accordingly.

Just thank your lucky stars it wasn't repossessed between exchange and completion!

james10999

silvercar wrote: »

Some of the fault with this should lie with the owner. They should have informed the lender that a sale was iminent. In fact, I don't understand why their solicitor didn't contact the lender.

There is actually an arguement for saying the price should be reduced. You were previously buying it on the open market, now it should be priced for a quick sale.

The lender has a duty to obtain the best price, so they should take a view on how quickly it will sell and price accordingly.

Just thank your lucky stars it wasn't repossessed between exchange and completion!

Thanks for the comments from everyone - i'm really stressing out about this and worried about ending up homeless!!

I've phoned the estate agents and they have informed me that the vendors have two mortgages secured on the property - does this make it any more complicated? I have asked them to reduce my offer now to £131,000 after phoning by bank as they have said as long as I still borrow the same amount of money from them and take a reduction in my deposit, it shouldn't matter.

Any implications for the mortgage lendors then for them having 2 mortgages?

HelpWhereIcan

This is a situation that you have to be very careful not to make assumptions about the stage repossession has got to.

It may well be that a repossession order has been granted, but that the bank has not actually taken possession yet.

If they have not taken possession yet, the vendor could file a 'N244' with the court to delay the repossession for long enough to allow the sale to go through.

If the property has been repossesed, the fact is that both lenders have a duty to obtain the best possible price for the property and will have to publicise any offers they receive for 7 days before accepting them. They have to show that they have attempted to sell at the full market value and send to auction only once they have been unable to do so. So, IMHO, getting a lender to accept a low price just because they have repossesed a property is not as easy as it is made out to be and may only happen if the property is marketed for a while and not sold (potentially including an auction appearance).

The fact that there is a secured loan lender involved tells me that it is likely that the possession was actually forced by the secured loan lender - especially if they are sub prime.

What it means to you practically is that you offer will have to be enough to pay both mortgages off or they will just pursue the possession. Try and find out if the vendor's solicitors have tried to negotiate a reduced settlement figure 'in full and final settlement" to help the sale go through. Basically saying "take 95% of what you are owed now rather than 100% (or possibly less) in 6 months."

From the sounds of it, your vendor needs specialist advice to make sure they don't lose out