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buying a reposession house


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hi

hopefully someone may be able to help me,

I am a first time buyer and have a mortgage agreed in principle, i have found a house and put an offer in which has been accepted,

Because the house is a reposession an advert has to be placed in the local paper stating that an offer has been made on the property and anyone wanting to place a higher offer must do so now. We were told that this notice would be for 7 days.

The add has now been placed in the local paper but the wording says anyone can make a higher offer until exchange of contracts, surley this can not be right, i am about to instruct a solicitor and valuer at my expense but do not want to do so if a higher offer can be made and accepted before exchange of contracts.

The estate agent selling the property have tried from the start to get us into see there mortage advisor, but as we alreardy had a mortgage agreed there was no point us seeing him, they have been very forceful trying different ways to get us to have a mortage with them we have really had to stand our ground.

Does anyone know the laws concerning selling a reposessed house can someone really leave it to just before the exchange of contracts to put in a higher bid although we have gone to the expense of valuation fees etc

look forward to hearing from someone soon

regards

carole

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They can wait for exchange of contracts for higher offers. This is why I walked away from the purchase of a repossesion home.

 

My advice, if you can't afford to lose the legal fees etc, don't go forward.

 

Also, with regard to the mortgage advisor thing: I'd say the estate agent are on commission for getting you in to see their advisor.

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Wouldn't this apply to any house sale. Just because a price has been agreed between the vendor and the buyer doesn't mean that someone can't come in with a higher offer prior to exchange of contracts. This is usually referred to as guzumping and is unfair but surely not illegal in england as yet? Makes no difference if the house has been repossed surely, accept for the fact that a vendor may be fair and honest enough to honour the first offer, where in a repossesion they have to seek the highest price they can for the bank building soc.

Defo agree about the mort advisor thing, we had a simular thing when we were buying our house. Used to get in a short blunt "don't need any mort advice" straight at the start of all conversations with them lol.

Good Luck

ali x

Btw I am no expert just give notes based on what I have read on here and other forums/sites, plus my own experiences and investigations.

 

All ccj's now dropped off file, 2 yrs to go to clear file.

All old debts either settled or made unenforcable.

 

RBS MPP-Full offer at 8 wks from first complaint

RBS Overdraft loanguard-full offer at 8 wks from complaint

Citicard ppi-with FOS finally paid 8 months after offer through FOS!

Capital one x2- with FOS

Monument ppi-with FOS

aqua x2 ppi-partialled settled still pushing for the rest

Black horse ppi-offers made and accepted except for one early loan they say no info held-still pushing for payment

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spenttoomuchagain As a first time buyer with a mortgage arranged you are in a very strong position, and it is you who should be dictating the terms of the purchase. I would tell the estate agents that if no higher offer is received in 7 days, you will expect the house to be withdrawn from the market.If they will not or can not, tell them you will withdraw your offer - and then do it. There are plenty of other houses out there. The danger is that if you have a survey done, just before exchange of contracts the Estate Agent can 'produce' a higher offer, whether they have had one or not.You will have committed money and would then feel the pressure to increase your offer.Out of seven house purchases I have had to do this twice.On a third time, the vendor told me he had another offer, and the first one to exchange contracts would have the house.I walked away.Later I learnt that the vendor did not have title to the land the house stood on, leading to very expensive legal fees for the person who actually bought.
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This is quite normal in the housing market regardless of it being a reposession or not. Nothing is legally binding until the exchange of contracts.

 

However, you could easily put conditions on your offer and hope that the vendor accepts those conditions. Such as, the vendor will agree to pay for costs incurred by you should the vendor accept another offer.

 

See a solicitor.

 

Also, I see no harm in seeing the estate agents mortgage advisor.

 

How would you know otherwise that a better offer is available from them if you never see them?

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This is quite normal in the housing market regardless of it being a reposession or not. Nothing is legally binding until the exchange of contracts.

 

However, you could easily put conditions on your offer and hope that the vendor accepts those conditions. Such as, the vendor will agree to pay for costs incurred by you should the vendor accept another offer.

 

See a solicitor.

 

Also, I see no harm in seeing the estate agents mortgage advisor.

 

How would you know otherwise that a better offer is available from them if you never see them?

 

Agree totally no harm in getting more info from another morg advisor and the est agent will need to see you are in a position to buy anyway, as it's a repo though do you need to complete within the 28 days? Last 3 buy to lets have been repo's lost one after the public notice as the offer went up by £5k lost my search fee's and val fee, however conditions or threatening to pull out rearly gets them upset. Good luck.

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I used to be a mortgage advisor, unfortunately there isnt a right lot you can do about it. As Weird Al stated above, it is quite normal, just because it is a repossession it doesnt mean people cannot put higher offers in than yourself, if they do you have been gazumped, but unfortunately that is the risk you take with buying any house, not just a repo. Until you have exchanged contracts, nothing is legal to say that that house is yours. As for the estate agents trying to get you to use their mortgage advisor, you can stand your ground and tell them you have already got a mortgage in principle but just be aware that a mortgage in principle does NOT guarantee you 100% to get the mortgage with the company you have gone with, it is a good idea to shop around with different lenders as a lot of them will give you incentives to go with them especially being a first time buyer. You are not guaranteed to get a mortgage until you have sent in all your paperwork (they want to check your payslips, ensure you have a bank account etc), been through the credit score (if you have defaults or ccj's or iva's a lot of high street banks will not touch you with a bargepole!), have had a valuatin on the property (the property may not be up to the standard that the mortgage company will allow, and if this is the case they may hold a retention on the money until the work is carried out that needs doing) and have a mortgage offer sent to you. (phew! that was all a lot to remember!!).

 

Good luck

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if your in the postion to buy straight away then go for it, but push push and push your morg advisor and solicitor to complete as soon as poss. These have been my best buys good luck.

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It is true that any house, prior to exchange of contracts, CAN be sold to a higher/better offer - but rarely is an advert put in the paper, INVITING more offers. I think that may be the point - it may draw people out of the woodwork...

 

Of course this site deals with both ends of the spectrum. We've seen a few threads on here where people are up in arms (and rightly so) that their mortgage provider has NOT mitigated its losses, and has dumped their house below market price, leaving them liable for a shortfall... so worth remembering in all of this that if someone is 'winning' then someone else is 'losing'.

 

Good luck with the purchase, and I hope it works out for you. If you've offered at a fair price, remember that there are rules that Estate Agents must follow, and they can't fabricate offers just to get you to increase yours. If you know your offer is a bit on the low side, and ARE prepared to pay more, there's no harm in upping your offer if you are 'outbid', seeing as you know the house is worth more (to you) than you are currently paying.

 

If you've already offered top money, it is a bit of a gamble, but if you push your solicitor towards a speedy exchange of contracts, you will minimise your exposure to risk...

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It is true that any house, prior to exchange of contracts, CAN be sold to a higher/better offer - but rarely is an advert put in the paper, INVITING more offers. I think that may be the point - it may draw people out of the woodwork...

 

Because it is a repo, the EA (as agent for the mortgage company) has to be able to show that the best price was obtained, hence the public notice. This is in case the person who was repossessed ever wished to take legal action for not doing so.

 

It is a legal requirement (Estate Agents Act 1979) for all offers received to be forwarded to the seller - this means up till exchange of contracts, unless the seller has instructed the agent otherwise in writing (which a mortgage company cannot do - they have to demonstrate that they have sought the best price until the sale is unconditional.

 

You have a mortgage offer. You can arrange for the searches to be done personally (normally 48 hour turnaround). The only thing you cannot control are the lawyers. Be they quick or slow, you will have little input, nor recourse.

 

If you are confident that the property is good value, you could exchange contracts within a week, completion no later than 3 months away (I've done this). It is a risk though, as there are penalties if you don't complete on time.

On some things I am very knowledgeable, on other things I am stupid. Trouble is, sometimes I discover that the former is the latter or vice versa, and I don't know this until later - maybe even much later. Read anything I write with the above in mind.

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Esio,

 

I agree that the EA has to get the best price for the house - as I said, there are examples in other parts of the (debt) forums where this obviously hasn't happened, and this adversely affects the repossessee.

 

The Repo house differs from a private sale, because in a private sale the vendor wouldn't put an advert in the paper inviting higher offers - so it is perhaps MORE likely that someone would gazzump a buyer in this situation, which does create a bit of an imbalance.

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  • 1 year later...

This offer was made on a reposssed house which was owed by the bank or some financial institution.

 

Below is the letter I received from them

 

Further to your recent offer of ****** made subject to contract for the purchase of the above property, we are pleased to confirm that this offer has been accepted by our client, subject to a public notice and the terms set out in this letter.

IMPORTANT: Your solicitor will be issued with draft contracts within the next 72 hours. Acceptance of this offer is also subject to a 14 day exchange. Therefore, survey should be carried out within 10 working days and searches must be applied for upon receipt of contracts.

Please note that our client is required to obtain the best price possible for the property, it must remain fully available to exchange of contracts. Any expenditure incurred, ie: survey fees, legal costs etc will be your own responsibility whether or not you are the successful purchaser.

We trust the above clarifies the position of the proposed sale, but should you have any queries in the meantime please do not hesitate to contact our agent.

 

 

Within 14 days we were ready to exchange contracts and they advised me they have received a higher offer and asked me to increase my original offer.

 

The public notice was not put up in the local paper 16 days later only had the offer I made and not the one that claimed to be higher then mine.

 

Sending documentation to my solicitors naturally I am going to incurr costs if we have to meet the timescales set for acceptance.

 

If anyone could add anything on this would be much appreciated.

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You have to remind yourself that the agent acts for the seller, not the buyer.

 

They are required, particularly in repo cases, to achieve the best price. If you feel that a supposedly higher offer is spurious, then you would need to approach trading standards.

 

The higher offer might have come from a speculative visitor to the agent's office. I've done it: "Got any good value properties at the moment?" "Got this one. It's under offer and exchange is expected in about a week." "How much?" Can't tell you that, but you can make an offer and I'll see if the seller will accept."

On some things I am very knowledgeable, on other things I am stupid. Trouble is, sometimes I discover that the former is the latter or vice versa, and I don't know this until later - maybe even much later. Read anything I write with the above in mind.

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I know the agent acts for the buyer. But why get you running around like a chicken to exchange within 14 days if they wanna keep the house on the market.

 

They could have said if we receive no bids within 14 days then its yours instead they send legal documents to my solictors to start preparing the legal purchase.

 

I think its wrong they way this estate agency conducts its business.

 

Gazumping is not legal in the Scotland.

 

I wonder if the Unfair Contract Terms In Consumer Contracts apply to this complaint. Its in the Estate Agents Code of Practice.

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