Bidding on a Reposession

ciaranmack

I was recently Gazumped by a cash buyer on a repossession I was close to completing on, I have since made higher bids which have been accepted and then matched by the cash buyer.


Today I made a higher bid and was told it was rejected by the asset management company as the other buyers are in a better position. I thought the asset management company had an obligation to get as much as possible for the property.


Does anyone have any experience of this?

SmashedAvacado

Yes. I have done this. Its not ethical particularly but i did the following.

Offer more (by 10k in my case), do the legal work etc
then at the last minute identify a legal issue and drop your offer back to the previously matched offer on the basis you will exchange right away.

ciaranmack

I am the current highest bidder but the Estate Agent has said the asset management team won't accept it? and are going with the cash buyer at the lower offer?

G_M

They have to get the best price but that ay not always mean the highest. As an extreme example, a cash buyer who can exchange tomorrow for £200K is 'better' than a £210K buyer who needs to apply for a mortgage which will take a month and may be rejected.


Clearly getting the property sold and off the bank's books has a value in itself .


Smashed's suggestion may work. If the bank really believes that you will exchange tomorrow at the reduced price or will walk away leaving the property on their books ad infinitum, they may agree.


If they think you're bluffing, or they have another buyer in the wings, they may say no.

SmashedAvacado

so you can up yours a bit more until it is acceptable and then when you are ready to exchange bring it down. At the point you ask to bring it down, you will be the most proceed-able buyer

G_M

ciaranmack wrote: »

I am the current highest bidder but the Estate Agent has said the asset management team won't accept it?
Is that a question? I'm afraid I have no idea if that is what the EA said.

and are going with the cash buyer at the lower offer?

Again, I cannot answer. Perhaps they are going with the cash buyer. I do not know.

davidmcn

The lender is entitled to take proceedability into account, not merely who's shouted the biggest number at them.

ciaranmack

Thanks for the replies, some food for thought there.

eddddy

ciaranmack wrote: »

I was recently Gazumped by a cash buyer on a repossession I was close to completing on,

I guess you mean close to exchange of contracts.

• How long was it since your offer was accepted?
• Did you have a firm mortgage offer on that specific property?
• Would you now need a bigger mortgage because of your higher offer?

Asset Mgmt companies usually expect you to get to exchange within 28 days - if you had taken much longer, they might see you as an unreliable buyer.

If you had a firm mortgage offer, you're essentially as proceedable as a cash buyer.

But your lender won't revalue the property based on your higher offer - so you might have to find a bigger deposit.


If the Asset Mgmt Co are concerned about the mortgageability of the property, or your ability to get the mortgage you need - that might mean that they won't consider your offers, however high.

ciaranmack

In fairness a previous mortgage was declined due to the survey (electricity pylon within 60m of property).


My original offer was accepted approx. 5 weeks ago and we would have completed but for the survey. Subsequent offers were accepted as late as yesterday but my latest offer this morning was rejected.


I do now have a mortgage in place and the increased price doesn't affect it.

hazyjo

In this case, I'd not even call it gazumped. It's the risk you take when buying a repo. All you can do is race it along to exchange as quickly as possible and hope nobody beats you along the way (sounds like you've already tried that - 5 weeks is mega quick). I would have been very reluctant to buy a repo, unless it was too good a price to refuse making it worth at least a few attempts at getting it.