Reduce offer on leasehold repossession billed as freehold?

chanz4

Until exchange they can do as they wish, what have to remember is they also have to be seen to get the best price for the person it was repo off as they will have to make up the difference

davidmcn

cziffra wrote: »

the thing I'm unsure of on the legal side is whether they can reasonably stall things on the basis of a reduced offer, in the hope of someone else outbidding.

They're legally obliged to their borrower to take reasonable steps to get the best price, so if doing that would enable someone to outbid you then yes, they can (and arguably should) be doing it.

eddddy

cziffra wrote: »

Also, I'm aware of the fact there's no legal obligation, but I'm looking at not exactly in terms of etiquette but in terms of what might be regular accepted practise here. I don't want to feel like some kind of shark who's out to screw them to the max, but I'm not willing to get casually screwed by them either .

EDIT sorry, I did mention legal issues but the thing I'm unsure of on the legal side is whether they can reasonably stall things on the basis of a reduced offer, in the hope of someone else outbidding.

If you reduce your offer by £10k, I suspect they will put it back on the market.

They have a legal duty to achieve the best price reasonably possible.

Advertising that they have an offer of £126k and then selling for £116k, without giving others an opportunity to offer higher than £116k, might be difficult to justify in a court case.

But even after a suitable time, your offer of £116k may still be the best.


(Also, if the premium for the lease extension is £10k, there are likely to be fees of a few thousand on top.)

TrickyDicky101

eddddy wrote: »

If you reduce your offer by £10k, I suspect they will put it back on the market.

If it's a repo I presume it remains on the market until exchange anyway?

£480 pa is steep - where do you get the £10k for freehold purchase from (is it a figure the EA has told you)?

re there any GR escalation clauses within the lease? That could make the f/h purchase expensive.

eddddy

TrickyDicky101 wrote: »

If it's a repo I presume it remains on the market until exchange anyway?

The property is under offer and the lawyers are working towards exchange of contracts at £126k/£125k. If a better offer emerges before exchange happens, the lawyers will switch and work with that offer instead.


If the OP drops their offer to £116k, I suspect the offer will be rejected and the lawyers will stop working towards exchange of contracts. The EA will re-market the property and actively invite new offers.

But they may still not get an offer better than £116k, and therefore accept the OP's offer.

cziffra

chanz4 wrote: »

Until exchange they can do as they wish, what have to remember is they also have to be seen to get the best price for the person it was repo off as they will have to make up the difference

Seems unlikely the original list price would be geared at a loss, surely? The lowest I'd go would match that.

cziffra

eddddy wrote: »

The property is under offer and the lawyers are working towards exchange of contracts at £126k/£125k. If a better offer emerges before exchange happens, the lawyers will switch and work with that offer instead.


If the OP drops their offer to £116k, I suspect the offer will be rejected and the lawyers will stop working towards exchange of contracts. The EA will re-market the property and actively invite new offers.

But they may still not get an offer better than £116k, and therefore accept the OP's offer.

Outright reject an offer beyond the list price? I doubt if that would even be lawful. I think you're forgetting that the house was incorrectly advertised. Previous offers existed solely in relation to this. The only possible issue would be if they insist on extra time to look for more bidders.

cziffra

To clarify the law, as a repossession its ALWAYS on the market prior to exchange of contracts. There's no question of simply refusing a bid, even if it was a plain silly one. It's a matter of whether they are obliged to stall after any reduction, or whether it can go straight through to exchange as long as the adjusted offer is reasonable. For that reason, I'm leaning towards threatening 115 but saying I'll meet then in the middle at 120.

Also, the freehold is quoted at 8500 on a calculator which will doubtless hit ten thousand after fees.

lonestar1

Have you checked the lease to see if it includes any reference to ground rent increases ie doubling every 10 years would be a concern for me

cziffra

lonestar1 wrote: »

Have you checked the lease to see if it includes any reference to ground rent increases ie doubling every 10 years would be a concern for me

I'm not sure yet. It's a council lease through, rather than commercial. I think it's probably just inflationary.