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Can anyone help with advice over a re-possessed property please ?

I am about to place a bid on a repo. I know the property quite well and I have been following it for 6 months (last owner did a runner and it's been empty since then).

I have been given a "guide" price on the property which, IMHO, is way below market value. But there is only going to be one viewing with all interested parties there. Without giving too much away it is an unusal rural property. I am a cash buyer. I have been told that cash buyers are preferred but my problem is how to pitch the bid. The guide price ? A little above ? A lot above ?

I am quite experienced at buying such rural properties but never bought a repo. before. Is there anything to be wary of that doesn't happen with auctions or private sales ?

Thanks for any help received.

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Can anyone help with advice over a re-possessed property please ?

I am about to place a bid on a repo. I know the property quite well and I have been following it for 6 months (last owner did a runner and it's been empty since then).

I have been given a "guide" price on the property which, IMHO, is way below market value. But there is only going to be one viewing with all interested parties there. Without giving too much away it is an unusal rural property. I am a cash buyer. I have been told that cash buyers are preferred but my problem is how to pitch the bid. The guide price ? A little above ? A lot above ?

I am quite experienced at buying such rural properties but never bought a repo. before. Is there anything to be wary of that doesn't happen with auctions or private sales ?

Thanks for any help received.

Hi

I have bought a few bank owned houses and in all cases the selling agent was required to advertise the sale agreed price in a local newspaper. This is to invite the best possible price and cover the bank from accusations of underselling.

I would ask the agent if this practise will occur in this case. You can then not even bid until a sale is agreed and then make a decision.

Good luck

Edited by martakii

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Hi

I have bought a few bank owned houses and in all cases the selling agent was required to advertise the sale agreed price in a local newspaper. This is to invite the best possible price and cover the bank from accusations of underselling.

I would ask the agent if this practise will occur in this case. You can then not even bid until a sale is agreed and then make a decision.

Good luck

Thank you for the reply. It has been confirmed that the agent is advertising on the Internet and one advertisement in a local paper. I haven't asked if any bids are going to be advertised in order to attract higher bids. But I have stipulated that I do not want to get into a bidding war and the agent has assured me that they don't want that either. I'm not really happy going to sealed bids having done that before but it may well happen.

I have been told by the EA that they want my bid because I am a cash buyer, they want me to buy it blah di blah, but if I put a bid in early it will then be used as a stick to beat other bidders with ?

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Thank you for the reply. It has been confirmed that the agent is advertising on the Internet and one advertisement in a local paper. I haven't asked if any bids are going to be advertised in order to attract higher bids. But I have stipulated that I do not want to get into a bidding war and the agent has assured me that they don't want that either. I'm not really happy going to sealed bids having done that before but it may well happen.

I have been told by the EA that they want my bid because I am a cash buyer, they want me to buy it blah di blah, but if I put a bid in early it will then be used as a stick to beat other bidders with ?

Normal procedure is that once a sale is agreed the lender will require the agent to advertise saying that a sale has been agreed and what the price is. This is after the sale is agreed through whatever route.

If I were you I would ask the agent if the property has to be advertised once the sale is agreed. If yes then make a reasonable offer now and wait and see what happens. You can always make a higher offer if somebody beats you in sealed bids. You will know what to offer as it will need to be advertised. A repossessed house is never really off the market because the bank is duty bound to achieve the best possible price. Any offer you make by law has to be forwarded to the bank no matter what the sales stage.

The key is if the vendor is required to advertise the sale agreed price, once you know this you can make informed decisions. If they are not required to advertise then you’ll need to bid normally. However remember even if you are beaten you can make a later offer whenever you like. There is no best and final with repossessed homes.

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Normal procedure is that once a sale is agreed the lender will require the agent to advertise saying that a sale has been agreed and what the price is. This is after the sale is agreed through whatever route.

If I were you I would ask the agent if the property has to be advertised once the sale is agreed. If yes then make a reasonable offer now and wait and see what happens. You can always make a higher offer if somebody beats you in sealed bids. You will know what to offer as it will need to be advertised. A repossessed house is never really off the market because the bank is duty bound to achieve the best possible price. Any offer you make by law has to be forwarded to the bank no matter what the sales stage.

The key is if the vendor is required to advertise the sale agreed price, once you know this you can make informed decisions. If they are not required to advertise then you’ll need to bid normally. However remember even if you are beaten you can make a later offer whenever you like. There is no best and final with repossessed homes.

What you have written makes a lot of sense. Thank you for that. The EA has told me that they will make a recommendation to the banks (there are two involved) and that cash is king. The property was sold in 2006 and the suggested price now is approximately 2/3rds of the purchase price that was paid at that time. Maybe that's all the banks are in for and as long as they can get their money back then that's all they are interested in.

You mention about being being beaten in sealed bids. The only time I purchased with a sealed bid the bids were opened at a particular hour and the winner was the new owner. Are you saying that even with sealed bids that the EA can go back to bidders to get better bids even after the deadline has passed and all bids have been opened ?

This is putting me at a distinct disadvantage and I like to be in control a bit more than that. If I make a bid is it sensible to put a time limit on it ? i.e. "This is my bid but it expires X days from now and so if you want to sell it definitely to a cash buyer close the book and let's do it" I have been asked to prove my liquidity which isn't a problem.

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In my experience you can offer on a repossessed house at any time upto exchange of contracts. The vendor/banks are required by law to achieve the best possible price. If they turn down a higher offer then they are liable to the default borrower. Not a position the bank will put themselves in.

So until exchange the property is on the market no matter what the agent says. The sealed bids, open day viewing arrangement etc are sales techniques.

My advice is number one find out if the property sale price will be advertised after a sale is agreed. Number two make a reasonable offer now in writing clearly defining your position and cash nature. Three can only be determined once events take place but by making an offer now you are in the consideration. All your other points are answered by the sale price getting advertsied or not. If it does you can make a later offer they have to take it. If its not advertised then its a blind game I'm afraid.

Ask for your written offers to be sent also to the vendor or send them directly as well if you know the lenders. The agents may not be completly impartial.

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In my experience you can offer on a repossessed house at any time upto exchange of contracts. The vendor/banks are required by law to achieve the best possible price. If they turn down a higher offer then they are liable to the default borrower. Not a position the bank will put themselves in.

So until exchange the property is on the market no matter what the agent says. The sealed bids, open day viewing arrangement etc are sales techniques.

My advice is number one find out if the property sale price will be advertised after a sale is agreed. Number two make a reasonable offer now in writing clearly defining your position and cash nature. Three can only be determined once events take place but by making an offer now you are in the consideration. All your other points are answered by the sale price getting advertsied or not. If it does you can make a later offer they have to take it. If its not advertised then its a blind game I'm afraid.

Ask for your written offers to be sent also to the vendor or send them directly as well if you know the lenders. The agents may not be completly impartial.

You are certainly giving me comprehensive advice, thanks again. I just get the feeling that the EA (a National chain) are going to play it by the book as far as making a recomendation to the two mortgagees (one a well known clearing bank, the other a subsidiary of a well known clearing bank). The EA has made great play on the fact that they have to abide by a set of rules and are inspected regularly to see that they are complying with them.

Do you think it is a good idea to put a deadline on any offer that I may make ? Otherwise the EA and the Mortgagees have all the trump cards. They will be shown concrete evidence that I have the ready funds to complete and if I stipulated that the bid is valid for X days then surely that will make them think about whether they are going to lose my bid or take it ?

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We purchased an apartment last year which was a repo, advertised with an agent.

I would say if you are a cash buyer put a bid in now, they can only refuse and if you want then you could offer more.

They will still advertise it until exchange of contracts but unless they get someone who is also a cash buyer my thoughts are they will stick with you. This is what happened in our case. As a cash buyer, get a lawyer in place for the paperwork so that if they accept your offer you can move fast. We were expected to be done in 4 weeks, but it was them who held things up in the end.

If you go to a closed bid situation i would walk away. Did this in the past and didn't get the house. Met the new owner a few months later and found out they paid about 30k less than we had offered. There was no reason they purchased it over us as we were cash buyers. I do wonder if the agent decided who they wanted to buy it as it wasn't about money. Avoided that agent ever since!

Go for it, good luck! B)

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We purchased an apartment last year which was a repo, advertised with an agent.

I would say if you are a cash buyer put a bid in now, they can only refuse and if you want then you could offer more.

They will still advertise it until exchange of contracts but unless they get someone who is also a cash buyer my thoughts are they will stick with you. This is what happened in our case. As a cash buyer, get a lawyer in place for the paperwork so that if they accept your offer you can move fast. We were expected to be done in 4 weeks, but it was them who held things up in the end.

If you go to a closed bid situation i would walk away. Did this in the past and didn't get the house. Met the new owner a few months later and found out they paid about 30k less than we had offered. There was no reason they purchased it over us as we were cash buyers. I do wonder if the agent decided who they wanted to buy it as it wasn't about money. Avoided that agent ever since!

Go for it, good luck! B)

Thank you for that Audi tt. The agent's arranged a block viewing yesterday when there were going to be "loads of interested parties". There were two others as well as myself ! Having said that they haven't advertised it anywhere yet and so they have obviously got a list of people who want to buy repo's.

I have had one of my lawyers in place for a week now and so he is up to speed. Don't fancy the closed bid scenario at all. Been there - done that !

Still deciding about a bid.

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Thanks for all the replies.

I bought the property but I feel as if I could write a book about it. I had a trusted friend bidding as well and if necessary I could prove that the EAs lied through their collective teeth.

Not a nice experience, except for the fact that I have had a bargain.

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