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OptimusSubPrime

Gazumping On Repos?

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Myself and wife just had an offer accepted on a repo yesterday. Its a very good deal for us, mortgage will work out less then rent (before additions) and about the same or maybe £50 more when everything alse taken into consideration. Anyway...the financials of it are not why i am posting, i have waited and saved and everything works out favourably for us in regards to affordablility etc.

As we now await the public notice, we are afraid of being gazumped by someone else befroe we can get the contracts exchanged. We REALLY want the house The mortgage company had previously carried out their credit checks etc when giving us their decision in principle about 6 weeks ago for an amount just under 20k less than we will (hopefully) only require to buy this house. So im hoping the bank will not take too long getting the full mortgage offer through to us now that we have submitted th rest of the docs they wanted.

Im thining it may still take a couple of weeks to get that through and get them to get the surveyor out to do the valuation etc.

Does anyone know how common it is for people to come in and offer higher amounts on repos? Im hoping that the EA will not exactly encourage any other bidders from now on, since they will be getting the house sold and get the same commision anyway.

itd be an awful pain in the hole to have to start bidding again etc!!

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If its over in the Waterside mate dont worry i'll not touch it :P Im only looking in the Cityside

All the best with it!

EDIT: My mate had SA on a repo but a few days later someone else came in with a higher offer

Edited by pajd

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From experience (i've probably viewed 4-5 repo's) EA's dont actively encorage other bits once they've formally been accepted. However, there legally obliged to pass on any offers. I have never been dissuaded by an EA not to make an improved offer except on just one occasion. (I didnt for moral reasons, but certainly would of if it was a invester or BTL!)

Buying a house is one of the most stressfull things, but getting involved with Repo's make it look like a walk in the park by comparison. Try not to get too excited if possible and hope you the best of luck.

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I thought Optimus was hunting on the City Side too?

I've heard of a few people gazumped on repos but I’m sure you'll be grand. Bets of luck.

No we are buying in the cityside. id hate for someone to force the price up, as the place is perfect for us. If can get it done then 2011 will have seen both me and the wife take new, better, permanent jobs and get our first house all before the 1st weding anniversary. Fingers crossed

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No we are buying in the cityside. id hate for someone to force the price up, as the place is perfect for us. If can get it done then 2011 will have seen both me and the wife take new, better, permanent jobs and get our first house all before the 1st weding anniversary. Fingers crossed

You should take yourself off somewhere nice to celebrate ;)

From my experience of getting outbid on repo's. Just the 2 so far :( agents don't encourage new bids once one has been accepted.

in one case they didn't even notify us of new higher bid and in the other they didn't encourage any offers just said another bid had been accepted.

There is no benefit to them of dragging it out. As understand it they gain very little out of it.

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You should take yourself off somewhere nice to celebrate ;)

From my experience of getting outbid on repo's. Just the 2 so far :( agents don't encourage new bids once one has been accepted.

in one case they didn't even notify us of new higher bid and in the other they didn't encourage any offers just said another bid had been accepted.

There is no benefit to them of dragging it out. As understand it they gain very little out of it.

That's about it - try not to dwell on what might happen, the odds are well stacked in your favour at this stage. Good luck and hope it works out.

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I disagree. If the price is good, at least here in the south east, then you will likely be outbid. I bought a repo for £10k more than the initial price and there was a higher offer on the table when I completed. It was only because the final counter offer was so late in the day and only a £1k increment that I was able to complete anyway, after 2 round of supposedly final offers had already been completed.

I've also been outbid on 2 other repossessions, both of which went for significantly more than the initial price (£10k in one case and £15k in the other). The first went for what I believe was a fair price, the second for more than I think it was worth, particularly given the state it was in. I pointed out to the agent that I wasn't going to increase my offer because it would be more economic to offer asking price on the one down the road which is completely renovated. I believe it's the norm for the initial offer to be outbid for desirable homes in good areas, for late and last minute bids and even for bids after the 'best and final offers' have been submitted, surveys completed, mortgages arranged and fees paid.

Also bear in mind it is normal practice for a reposession to be on the market with 2 separate estate agents concurrently since the bank must be seen to be getting best and fair price for it. Whereas I don't doubt your agent may not be encouraging offers, someone else may well be, and if they have any morals (which they may well not if they are like many, but not all, of the agents I have met) then even your agent will be trying to get best price for it, even if they already hold the client with the highest offer. The bank, and the original mortgagee is the client and they have instructed them to get market value for it. That's what they're being paid to do and it's not their remit to decide who should buy it and for how much.

Having said all that I wish you the best of luck. I don't regret buying my house one bit or the extra £10k i paid for it and I'm sure you won't either, just don't get carried away in the reposession 'auction'. Be realistic about what it might fetch in a free market sale and decide how much you are willing to pay for it in the state it is in. It's easy to get carried away in these situations. I'm naturally cautious but I've seen others pay more than market value in these situations.

Graham

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[quote name=Graham :)' timestamp='1315420777' post='3110668]

I disagree. If the price is good, at least here in the south east, then you will likely be outbid. I bought a repo for £10k more than the initial price and there was a higher offer on the table when I completed. It was only because the final counter offer was so late in the day and only a £1k increment that I was able to complete anyway, after 2 round of supposedly final offers had already been completed.

I've also been outbid on 2 other repossessions, both of which went for significantly more than the initial price (£10k in one case and £15k in the other). The first went for what I believe was a fair price, the second for more than I think it was worth, particularly given the state it was in. I pointed out to the agent that I wasn't going to increase my offer because it would be more economic to offer asking price on the one down the road which is completely renovated. I believe it's the norm for the initial offer to be outbid for desirable homes in good areas, for late and last minute bids and even for bids after the 'best and final offers' have been submitted, surveys completed, mortgages arranged and fees paid.

Also bear in mind it is normal practice for a reposession to be on the market with 2 separate estate agents concurrently since the bank must be seen to be getting best and fair price for it. Whereas I don't doubt your agent may not be encouraging offers, someone else may well be, and if they have any morals (which they may well not if they are like many, but not all, of the agents I have met) then even your agent will be trying to get best price for it, even if they already hold the client with the highest offer. The bank, and the original mortgagee is the client and they have instructed them to get market value for it. That's what they're being paid to do and it's not their remit to decide who should buy it and for how much.

Having said all that I wish you the best of luck. I don't regret buying my house one bit or the extra £10k i paid for it and I'm sure you won't either, just don't get carried away in the reposession 'auction'. Be realistic about what it might fetch in a free market sale and decide how much you are willing to pay for it in the state it is in. It's easy to get carried away in these situations. I'm naturally cautious but I've seen others pay more than market value in these situations.

Graham

are you SE england? bit of a higher demand for houses there i would say.

The property is only with one EA. The only thing i can do is wait and see, but there are so many repos starting to come on here now that hopefully any other prospective bidders just wait for the next one to come along, like a bus!

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are you SE england? bit of a higher demand for houses there i would say.

The property is only with one EA. The only thing i can do is wait and see, but there are so many repos starting to come on here now that hopefully any other prospective bidders just wait for the next one to come along, like a bus!

Optimus - you can safely ignore this, well intentioned as it might be. Its a chalk and cheese comparison -time to think of glasses being half full etc, otherwise you'll be a basket case with worry before you get across the finish line.

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From my experience of getting outbid on repo's. Just the 2 so far :( agents don't encourage new bids once one has been accepted.

in one case they didn't even notify us of new higher bid and in the other they didn't encourage any offers just said another bid had been accepted.

There is no benefit to them of dragging it out. As understand it they gain very little out of it.

Correct. If you are the only one so far to have put in an offer and it has been accepted by the repo company then it works for everyone to make sure the sale proceeds as smoothly as possible. The repo company will have been told of your position, will have see proof of your finances or deposit so can verify that you are genuine. The fact that they accepted your offer shows that it is good enough for their client so no need to drag it out for another 1k with the risk of the sale falling through if the buyer is not as strong as you.

We sell alot of repos so I'm speaking from experience here. Word of advice though; make sure your solicitor is not some laid back lazy bugger or you will risk losing the house. Repo companies set deadlines for exchange of contracts and have been known to pull a sale if the purchasers side is seen to be dragging their heels. Tell your solicitor from the outset that this is a repo and everything needs to be done quickly but without cutting corners. This also reduces the chance of someone coming in and gazumping you as once you have signed the contract no higher offers can be accepted.

Just a little bit of info on the repo market for everyone - we have seen our level of new instruction on repos increase 3 fold in the last month. Last week our company were given 7 repos to sell while the week before we got 3. 10 repos in a fortnight for one relatively small estate agency is huge. Given that the previous levels were around one per fortnight you can see that things are hotting up and banks are pulling the plug on alot of bad debt. Keep your eyes out for a few bargains across the country from now till xmas.

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Correct. If you are the only one so far to have put in an offer and it has been accepted by the repo company then it works for everyone to make sure the sale proceeds as smoothly as possible. The repo company will have been told of your position, will have see proof of your finances or deposit so can verify that you are genuine. The fact that they accepted your offer shows that it is good enough for their client so no need to drag it out for another 1k with the risk of the sale falling through if the buyer is not as strong as you.

We sell alot of repos so I'm speaking from experience here. Word of advice though; make sure your solicitor is not some laid back lazy bugger or you will risk losing the house. Repo companies set deadlines for exchange of contracts and have been known to pull a sale if the purchasers side is seen to be dragging their heels. Tell your solicitor from the outset that this is a repo and everything needs to be done quickly but without cutting corners. This also reduces the chance of someone coming in and gazumping you as once you have signed the contract no higher offers can be accepted.

Just a little bit of info on the repo market for everyone - we have seen our level of new instruction on repos increase 3 fold in the last month. Last week our company were given 7 repos to sell while the week before we got 3. 10 repos in a fortnight for one relatively small estate agency is huge. Given that the previous levels were around one per fortnight you can see that things are hotting up and banks are pulling the plug on alot of bad debt. Keep your eyes out for a few bargains across the country from now till xmas.

And what effect, if any, is this having or anticipated to have - in your opinion - on the wider market?

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And what effect, if any, is this having or anticipated to have - in your opinion - on the wider market?

It would be good if the sales figures made their way on to the house price indexs. It would provide some realism to the market.

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Just a little bit of info on the repo market for everyone - we have seen our level of new instruction on repos increase 3 fold in the last month.

Do these all end up on propertynews/pal or would you need to be actively engaging with agents to be made aware of them?

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Do these all end up on propertynews/pal or would you need to be actively engaging with agents to be made aware of them?

I would expect that once they had tapped up their relatives, friends, business contacts, other EA's they are friendly with and had weeded out the 'bargains' then, and only then, would it go to PN/PP or failing that, to you. At a different price than that offered to the first 'client group'.

Think of a low mileage little old lady car coming into a car dealers as a trade in, and how many it will go round - dealer, wife, secretary, sales rep, relative, mechanic, mechanics GF (or BF?) etc etc at cost before slipping through the net and onto the forecourt at 'market value' and you'll get the picture.

My brother in law tried this and was politely told to GTF. No doubt there was quite a list of 'bargain hunters' in their family and business circles already - even in today's dire circumstances. As a proceedable buyer looking for a standard house (not repo) I have been contacted once in 2 yrs from 3 Agents.

EA's first priority is EA. Second is seller who pays wages.

Doing mainstream buyers a favour does not form part of either their business model nor their DNA. And people should be under no illusions about that.

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And what effect, if any, is this having or anticipated to have - in your opinion - on the wider market?

This is having a huge impact on the wider market (or at least the market in my area) in a number of ways: Firstly buyers are seeing asking prices on repos that are way below similar privately listed properties so they simply wont go and view the seemingly overpriced stock.

Secondly and more importantly vendors are seeing the asking prices and hear about what the repos sold for and this puts the fear of god into them. With so many repos on the market right now it's making my job a little easier to convince some vendors to reduce their asking prices as I can show them so many examples of houses similar to theirs that are about 20% cheaper. Slowly but surely vendors are moving away from the notion that their property is better than a repo and are now accepting that there is no real stigma attached to a repo so they need to reduce asking prices to get a viewing.

It's all good for buyers and the tide is clearly turning.

To answer Bakkah, we have to advertise all repos online so all of ours appear on propertypal but some agents choose propertynews, either way you wont miss seeing any if you go online. There is no secret club where investors get the best choice of repos as the repo company has to be seen to be getting the best price for their client (the banks).

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I would expect that once they had tapped up their relatives, friends, business contacts, other EA's they are friendly with and had weeded out the 'bargains' then, and only then, would it go to PN/PP or failing that, to you. At a different price than that offered to the first 'client group'.

Think of a low mileage little old lady car coming into a car dealers as a trade in, and how many it will go round - dealer, wife, secretary, sales rep, relative, mechanic, mechanics GF (or BF?) etc etc at cost before slipping through the net and onto the forecourt at 'market value' and you'll get the picture.

My brother in law tried this and was politely told to GTF. No doubt there was quite a list of 'bargain hunters' in their family and business circles already - even in today's dire circumstances. As a proceedable buyer looking for a standard house (not repo) I have been contacted once in 2 yrs from 3 Agents.

EA's first priority is EA. Second is seller who pays wages.

Doing mainstream buyers a favour does not form part of either their business model nor their DNA. And people should be under no illusions about that.

+one million.

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I would expect that once they had tapped up their relatives, friends, business contacts, other EA's they are friendly with and had weeded out the 'bargains' then, and only then, would it go to PN/PP or failing that, to you. At a different price than that offered to the first 'client group'.

Think of a low mileage little old lady car coming into a car dealers as a trade in, and how many it will go round - dealer, wife, secretary, sales rep, relative, mechanic, mechanics GF (or BF?) etc etc at cost before slipping through the net and onto the forecourt at 'market value' and you'll get the picture.

My brother in law tried this and was politely told to GTF. No doubt there was quite a list of 'bargain hunters' in their family and business circles already - even in today's dire circumstances. As a proceedable buyer looking for a standard house (not repo) I have been contacted once in 2 yrs from 3 Agents.

EA's first priority is EA. Second is seller who pays wages.

Doing mainstream buyers a favour does not form part of either their business model nor their DNA. And people should be under no illusions about that.

Completely wrong on this point Shotoflight. I agree with most of what you say but in this case you are misinformed. See my last post to Bakkah. Just to reiterate, repo companies have strict procedures which all the agents on their panel have to adhere to. This includes advertising the property clearly on pn/ppal, putting a for sale sign up, putting the property details in our office window and creating a brochure for the property. We get audited and secret shopped etc to make sure we comply. There is no way that the general public could miss a repo on the market and no one gets 'first dibs' at it, ever.

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Completely wrong on this point Shotoflight. I agree with most of what you say but in this case you are misinformed. See my last post to Bakkah. Just to reiterate, repo companies have strict procedures which all the agents on their panel have to adhere to. This includes advertising the property clearly on pn/ppal, putting a for sale sign up, putting the property details in our office window and creating a brochure for the property. We get audited and secret shopped etc to make sure we comply. There is no way that the general public could miss a repo on the market and no one gets 'first dibs' at it, ever.

OK. Everything else except tightly regulated repos, then. ;)

BTW, I've seen it happen on more than one occasion. No for sale signs, no advertising. Quietly sold, activity thrumming away in the background, new buyers or tenants move in. Not a word about it.

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OK. Everything else except tightly regulated repos, then. ;)

BTW, I've seen it happen on more than one occasion. No for sale signs, no advertising. Quietly sold, activity thrumming away in the background, new buyers or tenants move in. Not a word about it.

I'm with shoto on this one. I've seen it happening myself.

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I'm with shoto on this one. I've seen it happening myself.

I also have corroboration from an impeccable source. An EA. Examples can be provided. But won't.

Perhaps not mainstream, perhaps doesn't happen all the time, but happen it does.

Think also insider dealing. It's not exclusive to EA's.

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Oh, I've seen it happening too, on private sales that other agents are handling. (I know you are going to accuse me of doing it but I can honestly say I have never sold anything under the table unless the vendor expressly asked me to keep it quiet and was looking for a quick sale from a cash buyer etc and dodnt want their position to become public knowledge). As the topic is about gazumping on repos I thought you were accusing EAs of selling these without making them available to the general public.

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Oh, I've seen it happening too, on private sales that other agents are handling. (I know you are going to accuse me of doing it but I can honestly say I have never sold anything under the table unless the vendor expressly asked me to keep it quiet and was looking for a quick sale from a cash buyer etc and dodnt want their position to become public knowledge). As the topic is about gazumping on repos I thought you were accusing EAs of selling these without making them available to the general public.

Well, I suppose I was (present company excluded) - but I'll take your word for it that, in your experience, it's not the case with respect to reposessions.

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