Dodgy dealing from repo company?

FloppyG

Apologies in advance for a rather complicated post. We have been trying to buy a repossession property through an EA. As far as we know the property is owned by RBS but an asset management company is selling though the EA. They have a separate solicitor acting for them.

Our position was that we had sold our house STC and our buyer was ready to exchange as soon as we were ready to go.

We offered £264k. Price was agreed and we were given 28 days to exchange. So we started the searches and got our mortgage application going. Our offer was published on rightmove.

A week later a higher off was made, so we upped to £266k which was again accepted. New offer published on rightmove. Next week, another higher offer, so £270k was accepted and published on rightmove.

The next week another offer but this time I decided to let them win so I could see what they offered. £272,125 was published. So I went back with £273,950. Offer accepted and published.

We were now ready to exchange. Searches done, finance in place, buyer waiting. All we needed was the exchange and transfer contracts from the seller's solicitor.

A week went by without the contracts arriving... and then another offer came in. We explained that the only delay was their own solicitor not getting the contract to us and that we were ready to exchange... but they switched to the other bid anyway. Contracts arrived two days later.

First change of rules: THE NEW PRICE WAS NOT PUBLISHED!

I asked why. EA said the vendor had asked them not to, and they couldn't or wouldn't tell me how much the new offer was. How can they change the rules like that?

Unfortunately our buyer's mortgage offer expired a week later and what we thought would be a formality of renewing turned into a rejection, so we had to sell our house again. We did sell again, to a buy-to-let company who would use a bridging loan rather than a mortgage to speed things up.

We spotted the public notice in a free paper 3 weeks after we were outbid - new price £275k. All that delay and hassle for an extra £1050. We decided to go higher. Made an offer of £280K which somehow was matched exactly, so the vendor stuck with the other bidder. So we went all in and offered £289k which was again accepted.

After a week our new buyer's survey was booked, our mortgage offer was amended and things were going quite quickly, until EA called and told us our 28 days was up and the vendor was pulling the contract unless we can exchange today!

Apparently they worked out that we had been in pole position for 28 working days from when our solicitor first received the seller's pack, even though there were gaps of several weeks when we were outbid. They didn't care that it was their slow solicitor's fault we lost our buyer and needed time for our new buyer to get sorted.

Second change of rules: They now accepted the previous lower offer and said whoever gets to exchange first, gets the house. So if we win, we pay £289k - If they win, they pay £280k.

Our buyer then had some trouble with a very slow solicitor who should have been ready a week ago but has stated they 'should' be ready to exchange next Tuesday. This was relayed to the vendor via the EA.

Their reaction... They have removed the house from the market and pulled the contract from the EA. They said it was taking too long!

Seriously? What's going on here?

G_M

Repos are always stressful. Until Exchange anything can happen.

There's no duty on the seller to publish every accepted offer. Frankly I'm surprised they published ad many as they did. It is simply
a) a means to get a higher price and
b) an insurance policy by the seller in case the repossessed owner claims they have sold for less than they could have

The decision of who to sell to is a combination of
* price (higher is better), and
* speed (a buyer who's ready to Exchanged may be preferred over a marginally higher price from an umprepared buyer

but there is no fixed rule. Hence my starting statement it's stressful!

Why not reduce your offer to, say, £282 conditional on exchanging within 2 days.

FloppyG

OK, so we made the highest bid and were ready to exchange, but they still seemed to prefer the lower bidder who needs more time. But then they pulled the contract so we both lose out. Makes no sense.

If they would wait til Tuesday they could have £289k so I'm not sure why they would go for a lower offer!

Besides, who would I make the offer to? The house has been removed from the EAs website, they no longer have the contract to sell it.

Seems to me they just don't want to sell it for some reason. At least not to me. The other bidder seems to have been getting preferential treatment with rule changes, etc. Could just be paranoia I suppose.

G_M

You get your solicitor, if you're using one, to contact the seller's solicitor, saying he's ready to Exchange but that his client (you) has now reduced his offer to X so the cntract must reflect that if they wish to proceed.

Mossfarr

It might just be that the other bidder is a cash buyer, for the vendors they would be less of a risk as they are not subject to the 'whims' of a mortgage lender.
I bought a repo several years ago and as I was a cash buyer I was given priority over the other interested parties as they had to apply for mortgages.

Alarae

I've worked for one of the companies selling repossessions on behalf of the lenders. RBS wasn't one of my clients, but the procedures are broadly similar.

With ours, if we had done multiple notices due to multiple bids as long as we had a notice in for a set period of time for the highest amount we had been offered, which was later pulled due to being unproceedable, we did not have to do a new notice for a lower offer.

They would normally swap to a different buyer if there is a substantial difference- normally £1,000 or more even if it meant resetting the clock. Anything lower was negotiable depending on the additional time spent to reach exchange.

Due to the issues you have had with waiting for your buyers, they are weary of your chain. You need to get into a point where you can exchange pretty much that day, state your offer and get it in.

I've had sales fall through for higher offers after I had authorised exchange, but the solicitors had yet to do so. Cue me calling the solicitor to stop and we carried on with new buyers.

They are obligated to obtain the best price for the property, taking into account additional costs for legal on a new sale.

Procedures are clear cut. Every action is justified and isn't because they are prejudiced against you as a buyer. Sometimes taking the cheaper offer is better because time wise it is best not to waste anymore time.

Good luck OP. I would never buy a repo after working in the industry. Far too much hassle.

FloppyG

Thanks Alarae, that makes a lot of sense and I do understand why they would do that.

What I don't understand is why they would wait all this time, just until they get confirmation from my buyer's solicitor that exchange will be next Tuesday... and then pull the house off the market all together.

If they would just wait until Tuesday, they get £289k and we get the house. Why take it off the market? What are they going to do with it now? It's not like they're selling it to another bidder. They just aren't selling it right now.

Can I go directly to the asset management company to negotiate or will they only deal through an EA?

FloppyG

Mossfarr wrote: »

It might just be that the other bidder is a cash buyer, for the vendors they would be less of a risk as they are not subject to the 'whims' of a mortgage lender.
I bought a repo several years ago and as I was a cash buyer I was given priority over the other interested parties as they had to apply for mortgages.

Other bidder also needed a mortgage but was a first time buyer with no chain. But they have not gone with them either. They have taken the house off the market just days before they knew we could exchange! Makes no sense to me.

silvercar

Makes sense to me, in a matter of weeks they go from £264k to £289k. With offers coming in from lots of people regularly.

Someone has said they should hold back and revalue the property.

FloppyG

They pulled the contract from the EA and have relisted with another EA.

The new asking price is £255K - That's £34K LESS than we were offering.

Do you still think it makes sense silvercar?

G_M

I suspect you're desperately seeking logic, and understanding, where there may be no logic, and where you can never obtain the full picture.

It's a repo. Until you Exchange you're in limbo.