House Repossession - How does it work?

eddddy

Andrew_Ryan_89 wrote: »

- When the bank takes possession of the property, how is it sold and do they have to sell it at market value?

As others have said, the property will be advertised on the open market and sold to the person making the best offer.

But realistically...

- The bank will want to sell it in a limited time-frame. If you were selling privately, you might be happy to wait 2 or 3 months for the 'right' buyer to come along. You might also choose to sell at the 'right' time of year etc.

- The bank won't/can't answer any of the usual pre-contract enquiries:
. - have there been any disputes...
. - have any alterations been done without freeholder's consent, without building control sign-off etc...

That adds risk, which tends to mean people offer less.


(Although, if there really have been lots of disputes etc, it may be helpful that the bank doesn't answer.)

G_M

Apart from Lily-Rose's strange and erroneous claim, you have been given good advice above.

Andrew_Ryan_89 wrote: »

Hi guys,



I want to know -

- When the bank takes possession of the property, how is it sold and do they have to sell it at market value?
They will either:
* put it in a property auction (more likely as it is a difficult to mortgage property), where it will sell to the highest bidder
or
* place it with an agent and attempt to get the best price possible in the shortest time possible. As a repo, buyers will mostly offer below what it could otherwise possibly go for.

- If on the day of eviction, and by some miracle, my mum comes across the money to pay of the loan, can she still do this?
Almost certainly. Give her a suitcase with £40K in it(£34K + contingency for costs) and she'll be fine.

- Does she have to cover any fees from the bank, bailiff, etc?
Yes - all the above. Plus the estate agent fees (or auction fees) and the legal fees etc

- Does she receive the full sell price minus what she owes once the property is sold?
Yes, she'll get the sale price less the £34K and all other costs involved in the repossession and the sale

- Is there any rights, appeals or useful tips she should know about?

Many thanks guys.

If the property is sold for considerably less than 'market value', she will obviously receive less of the equity, and could in theory sue the bank for selling too cheaply.

However such cases are rare, and unlikely to succeed.

If it was sold at auction, the courts would assume the auction achieved the best price possible (highest bid).

If sold via an estate agnt, the bank will almost certainly place an advertisment in the local paper saying "An offer of £X has been received for the sale of [property address]. Any higher offers must be received by [estate agnt] by [date] after which the property will be sold".

Thi would convince the courts that the bank had taken all reasonable steps to get the highest price possible.

bris

The banks fees for this are astronomical, they somehow manage to eek it out to tens of thousands in fees.


It will end up in an auction and will go for a song.

silvercar

bris wrote: »

The banks fees for this are astronomical, they somehow manage to eek it out to tens of thousands in fees.


It will end up in an auction and will go for a song.

You have a crystal ball?

easilydistracted

I agree with the other poster who asks is it really too late to sell it yourself at auction?

davidmcn

bris wrote: »

The banks fees for this are astronomical, they somehow manage to eek it out to tens of thousands in fees.

Nonsense, the banks put this sort work out to tender and get some pretty competitive deals, given that more often than not they end up having to write off the costs.

AdrianC

Andrew_Ryan_89 wrote: »

The property is partly over commercial residence, has a short lease, is in need of refurbishment...
...worth at least £290k...

How short is the lease, and is that £290k an actual value for the property with all those factors taken into account, or some kind of ideal-world guesstimate?

Doozergirl

I'm shocked that she's been paying £400 a month to them and not making a dent.

Banks have an obligation called "Treating Customers Fairly" and this strikes me as not treating her fairly at all. What was the interest rate?

It sounds like it might be too late, but do think a last ditch call to Shelter could be in order.

What a shame. It sounds like Mum's mental health hasn't been in a great place. Be kind. There's probably a reason behind 'entirely her fault, should have known better' that makes it not entirely her fault and unable to do better, despite knowing.