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We recently viewed a property that turned out to be a repossession.

I personally think it is about 15-20% over priced based on sale prices I have seen on houseprice/nethouseprices etc.

However the agent rings us to say and offer 9% under current asking price is being considered (I wish other buyers did their homework first!)

I asked if they had to announce an offer has been made in the local paper and wait to see if there are any people willing to exceed this offer.

They got back to me and said once they have an offer that the vendor accepts they will no longer market this property as it is 'not worth the hassle' - is this strictly legal? Surely their job is to get max value for the bank, however long it takes?

Any EA's have any thoughts on this?

I have duped this on another site forum as am really interested in people's thoughts.

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We recently viewed a property that turned out to be a repossession.

I personally think it is about 15-20% over priced based on sale prices I have seen on houseprice/nethouseprices etc.

However the agent rings us to say and offer 9% under current asking price is being considered (I wish other buyers did their homework first!)

I asked if they had to announce an offer has been made in the local paper and wait to see if there are any people willing to exceed this offer.

They got back to me and said once they have an offer that the vendor accepts they will no longer market this property as it is 'not worth the hassle' - is this strictly legal? Surely their job is to get max value for the bank, however long it takes?

Any EA's have any thoughts on this?

I have duped this on another site forum as am really interested in people's thoughts.

The vendor is controlling the sale. If he is happy with the offered price (and it looks like he will be given your valuation) then he can sanction that no further advertising is done.

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W looked at a repro through an EA. They asked for "best and final" bids by a certain date. We placed a bid but the EA was still ringing us after the "final" date trying to talk it up. Eventually one was accepted. We didn't see any local advertisement of what it was.

The bid that was accepted fell through and the agent approached us once again for a "final and best". Once again we put in a bid that wasn't high enough. The sale went through this time. We were not disappointed to have lost this property and happy to have put a bid in at the price we did. Better properties have come on the market since then. We have seen the original property advertised as a rental twice now.

It looks as if EA's follow different proceedures given what the bank wants to do with the repos. Some we gave seen go to auction. Some are advertised with a "beat this" price. It does vary.

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Every repo I have dealt with as been the same.

The company dealing with it issue me with a list of their terms. This is usually a different company from the last due to lenders using different companies.

As usual I pass on all offers in writing, but I only have to advertise the offer that's been accepted and state how much the offer is. The property always remains on the market until the notice period from the advertisement expires. If no other offers are submitted, then the sale will proceed.

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We recently viewed a property that turned out to be a repossession.

I personally think it is about 15-20% over priced based on sale prices I have seen on houseprice/nethouseprices etc.

However the agent rings us to say and offer 9% under current asking price is being considered (I wish other buyers did their homework first!)

I asked if they had to announce an offer has been made in the local paper and wait to see if there are any people willing to exceed this offer.

They got back to me and said once they have an offer that the vendor accepts they will no longer market this property as it is 'not worth the hassle' - is this strictly legal? Surely their job is to get max value for the bank, however long it takes?

Any EA's have any thoughts on this?

I have duped this on another site forum as am really interested in people's thoughts.

There are no hard and fast rules on specifically how a repo is to be marked and sold. In reality, the bank who is selling (the mortgagee) is bound by very little as regards the property. The leading case on the matter is Silven Properties which contains a pretty full resumee of the law relating to a mortgagee's duties. As far as price goes he is under a duty to obtain "...the best price reasonably obtainable on the day of sale". He cannot sell at an under value simply to clear the mortgage debt.

How he actually goes about obtaining the price is largely up to him Silven talks about "..whether by fairly exposing the property to the market or otherwise", although it's difficult to see what "otherwise" may refer to as one would presume that if it hasn't ben fairly exposed to the market how would you know it's the best price reasonably obtainable?

As to what the agents do that's between them and the bank as they are the banks appointed agent and act on its behalf. It's the mortgagee (bank) who has the duty to obtain the best price. What often happens is that an ad may be taken out in the local press saying "We are in reciept of an offer of £XXX for YYY property, anyone wishing to make a further offer must contact us by ZZZ date".

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There are no hard and fast rules on specifically how a repo is to be marked and sold. In reality, the bank who is selling (the mortgagee) is bound by very little as regards the property. The leading case on the matter is Silven Properties which contains a pretty full resumee of the law relating to a mortgagee's duties. As far as price goes he is under a duty to obtain "...the best price reasonably obtainable on the day of sale". He cannot sell at an under value simply to clear the mortgage debt.

I doubt that this is a consideration for 99% of repo sales.

Most will be 100 (or 95)% loans on properties that have dropped by 20 or 30% (think overpriced city apartements) and the calculation the bank will have to make is: do we sell at an 80K loss or wait a while and only lose 60K. (In theory this loss belongs to the owner, but you can't get blood out of a stone)

This is an exact example for some repos that I considered. I was only interested at the 80K loss figure but the bank have set their sights at 60K and aren't moving. Several backed out buyers and three failed attempts at auction hasn't changed their minimum acceptable figure.

tim

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I doubt that this is a consideration for 99% of repo sales.

Most will be 100 (or 95)% loans on properties that have dropped by 20 or 30% (think overpriced city apartements) and the calculation the bank will have to make is: do we sell at an 80K loss or wait a while and only lose 60K. (In theory this loss belongs to the owner, but you can't get blood out of a stone)

This is an exact example for some repos that I considered. I was only interested at the 80K loss figure but the bank have set their sights at 60K and aren't moving. Several backed out buyers and three failed attempts at auction hasn't changed their minimum acceptable figure.

tim

Oh yes, this is all quite true and it still is in line with the rule of obtaining best price in Silven. The important thing is that he must obtain the best price reasonably obtainable on the day of sale, regardless of whan that day may actually be and he is under no duty to try and make it a day most advantageous to the mortgagor. A mortgagee is under no duty at all to actually sell a property or to sell it at any particular time or with a view to obtaining any specific price. He may sell it at whatever time he chooses or not at all and is perfectly entitled to wait until such time as he feels is most advantageous as long as he obtains the best price at the time it is actually sold. The only thing he cannot do is sell it for an under value simply to clear off his mortgage, well there are one or two other things he canot do - such as sell it to him self or an associate but that isn't really relevant here.

The longer he waits though the bigger his loss may turn out to be as he is responsible for maintaining it, insuring it and is responsible for making good any loss it may cause to others. If a pipe bursts and floods someone elses property it may end up costing him. The mortagor has a right to redeem the mortgager (to pay it off and regain possession) right up until a contract is exchanged with a new purchaser and the mortgagee must maintain the property in at least the same condition in which it was when he took possession.

Edited by 6538

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Oh yes, this is all quite true and it still is in line with the rule of obtaining best price in Silven. The important thing is that he must obtain the best price reasonably obtainable on the day of sale, regardless of whan that day may actually be and he is under no duty to try and make it a day most advantageous to the mortgagor. A mortgagee is under no duty at all to actually sell a property or to sell it at any particular time or with a view to obtaining any specific price. He may sell it at whatever time he chooses or not at all and is perfectly entitled to wait until such time as he feels is most advantageous as long as he obtains the best price at the time it is actually sold. The only thing he cannot do is sell it for an under value simply to clear off his mortgage, well there are one or two other things he canot do - such as sell it to him self or an associate but that isn't really relevant here.

The longer he waits though the bigger his loss may turn out to be as he is responsible for maintaining it, insuring it and is responsible for making good any loss it may cause to others. If a pipe bursts and floods someone elses property it may end up costing him. The mortagor has a right to redeem the mortgager (to pay it off and regain possession) right up until a contract is exchanged with a new purchaser and the mortgagee must maintain the property in at least the same condition in which it was when he took possession.

Interesting post. Are you an estate agent?

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Interesting post. Are you an estate agent?

People are always asking me on here what I am, what I do, where I've lived, etc? Usually a question related to the subject matter we happen to be discussing at the time - as if it makes a deifference to the value and quality of the issues I'm raising.

Seriously though, surely an EA will be too busy applying too much hair gel or polishing his Beemer to be able to learn obscure legal precidents relating to possesion and sale of repo's?

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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