Bought A Repo

[tinbin]

Sorry that I haven't been posting as regularly as I would have liked for a while ... but I have only been busy buying a new home!!

I decided to take the plunge again into home ownership because this particular house simply just ticked more boxes than it didn't and it represented good value for my money IMO, or in simple terms ... The right house at the right time. To give you a bit of background for those who are familiar with my situation, it is a 4 bedroom, semi detached property with a garage and a reasonable amount of land around it. The back garden is very private and the property it is in cul-de-sac location. It is in the same area as where I was renting so apart from the move itself, it has brought no disruption to my way of life/schools/ etc at all. The living space is fantastic - not too big but certainly a lot bigger than we are used to and it is the perfect family home for us at this time. It is not a new build property but was built in the 90's (back when it wasn't just all about developers greed!!) and the house has been well maintained. So all in all ... a good result for me.

The whole process of buying this property has been a roller-coaster ride from start to finish, it went on for approx 2 months so it may interest some of you to hear about the background to this.

It was a repossessed property that came onto the market a few months ago. I went to view it after watching it for a few weeks and got the usual sales dribble from the EA about how the market is on the up ... best time to buy ... better hurry up if I am interested as it wont sit ... and all that usual nonsense. After a while I couldn't listen to it anymore and told the EA exactly where I thought the market was going. Unsurprisingly he took an instant dislike to me and boy did that set the tone for any future dealings we would have. I watched the property for a further week after my viewing and then made my offer ... I offered the Rateable value of the property which was approx £20k below the asking price. This was instantly dismissed with an air of arrogance by the EA, his response was something like, 'this property will NEVER sell for that price' followed by a comical snigger as if I was some sort of school child who didn't know his ass from his elbow. I advised that I would leave my offer on the table for 1 week after which point it would be withdrawn and I asked to be kept informed of any further bidders.

2 days later the good old phantom bidder raised his head!!! ... unsurprisingly along came a phone call from the EA saying that someone had offered the full asking price ... followed up I should add by asking me what do I wanted to do about it ... The silence from him on the phone was quite something when I told him that I wanted to withdraw my offer completely. So off he went probably dumfounded that I didn't do what probably 90% of ppl do and raise my offer accordingly to suit him. It couldn't have been more than a few days after this when I got my next phone call telling me that the other party had dropped out... surprise, surprise. If anyone had any doubts about why EA's get slagged off then look no further??? If I had have reacted to this mystery bidder then I would have just done myself out of £20k. :angry:

This was when I got played (frustratingly!) ... I was informed that the Repossession Company were willing to consider my offer but wouldn't confirm acceptance due to the high interest that remained in the property. This bugged me no-end as they wanted to see my details of how much deposit I had, how much I needed to borrow etc but they were not prepared to offer any sort of commitment that they would accept my offer. Basically they wanted me to show my hand without them showing theirs, physcologically this seemed to give the EA some sort of misguided ego. It was at this point that I realised that this was turning into a game of cat and mouse. I reluctantly provided them with the information they needed and gave a deadline of 1 week for response. The EA made several phone calls to me during the course of that week and each time was making more and more noises that things where progressing it my favour but me being cynical its just seemed like there was more to it. Then all of sudden another party seemed to come out of nowhere, I could be forgiven on reflection for thinking that this other party was in the background the whole time and was also in the process of showing their hand, or validating their credentials if you like at the same time as me. To cut a very long story short they tried to trigger a bidding war. Again, I pulled out straight away and stood firm on my original offer. During my conversation with the EA he told me what the other party offer was and asked me to beat it. Going by what was then accepted and then updated on the public notice less than a hour after my conversation with him regarding their bid it is obvious as hell that the EA went back to the other party, told them I bid up and got them bidding against themselves, which increased their offer by a nice tidy sum of £5k from what he had told me. Any shred of credibility the EA had got blown to bits in my eyes after this.

I must admit at this point I thought it was a done deal and pretty much just forgot all about the property but to my surprise I received a call from the EA several weeks after this episode, it went along the lines of ... good news for you, bad news for me.. yada, yada, yada. The other party couldn't get a Mortgage so your offer is back on if you are willing to proceed and the Repossession Company are happy to go with you. As far as he was concerned I was just going to go .. 'no bother thanks for the call. Can we call it a deal then??' ... I had a different ideas and told him I was still interested but my offer was now 5% less. Probably in hindsight I should have dropped it by 10% as things had shifted massively in my favour. Once again the silence on the phone spoke for itself...

I will not bore you with the rest of the intricate details, cat and mouse games readily resumed and reluctantly they accepted my offer through gritted teeth. I read on this forum before that you need to have nerves of steel when buying a repossession and this turned out to be true to the mark. Even though an offer is accepted on the property it is not yours until the contract for the property has been countersigned by the solicitor acting on behalf of the Repossession company. Believe it or, less than 48 hrs before I was due to complete everything nearly fell through as another offer was received. Only for the fact that the contract had been countersigned that day and my solicitor leaned very heavily on them regarding them acting in bad faith they where going to pull the plug on the whole lot and leave me high and dry, and they wouldn't have cared less either.

After 400 posts on this forum I suppose now I can move on with the Housing part of my life for now. I was able to buy a house at RV -5% and for me it did represent good value for money. Interestingly, with regards to RV. I know we use it as guide on this forum, and I for one am a fan and like to use it but I must admit that I compared the RV of the property I bought to a similar property that was on the market around the corner from me (genuinely) and the house around the corner was valued at £15k more than the one I bought. I couldn't for the life of me work out why as the houses where exactly the same in terms of size. I then checked my next door neighbours (attached) and they matched the house around the corner!! Assuming mine was calculated incorrectly then I would have to assume that I managed to get it for more like RV-20/25%. The house itself was in good condition, no physical damage or concrete down the toilet (thankfully). There was some childish sabotage to the property but nothing major thankfully. I have been in it for a few weeks now so hopefully nothing else raises it head.

I still think that there is another 10-15% to go in house prices, perhaps more, but I think that they will stick for a while at this level if/when they do reach it. Some may ask why did you buy now then? I sold my house for RV+25/30% a couple of years ago so I have done ok in terms of the property market. Considering the price I ended up paying for my house compared to the asking price I wasn't convinced that if I waited another 1/2 years that financially it would be worth the wait. It was six to one, half a dozen to another for me in this case. I have saved myself in the region of £60k by renting for almost 2 years. Part of that is down to my own perseverance and views, but I also would personally like to thank the posters on this forum for their advice over the past few years as it has proved invaluable for me.

Edited August 20, 2012 by tinbin

[Si1]

what does RV mean?

[tinbin]

what does RV mean?

Rateable Value

[2buyornot2buy]

Great story TinBin. Thanks for posing. I've really reading enjoyed your posts during the past few years. Can I ask what area you bought in?

[Sure thing!]

Thanks for that story and good on you for not capitulating.

Been there in the past with the phantom bidders and the laughing aloud at you in the EA office to make you look/feel stupid only to have them come back later when you don't go along with what they wanted. It's all very well preaching to the converted on here but you really have to be prepared for the assault you may come under and you will doubt youself, having someone laugh out loud and shake their head at your "idiocy" isn't something that you normally have to deal with in life and it will have some impact, if you have a slightly less than convinced partner keep them away from this end of things or you'll end up with it from all sides if they have even a kink of doubt.

I will be posting at some point with some similar EA dealings (selling & buying) but I'm going to save it until the end which may be years away the way things are working out.

[Belfast Boy]

... I had a different ideas and told him I was still interested but my offer was now 5% less.

Part of that is down to my own perseverance and views, but I also would personally like to thank the posters on this forum for their advice over the past few years as it has proved invaluable for me.

Congratulations on your new home.

Fascinating story. No wonder EA's have such a bad name around here. Obviously their underhand tactics work on other people or they would not try them. Glad to here that you got another 5% off from laughing boy. Just shows how important it is to be prepaired to walk away!

Are all EA's liars or just most of them? Maybe we should have a poll?

[tinbin]

Great story TinBin. Thanks for posing. I've really reading enjoyed your posts during the past few years. Can I ask what area you bought in?

cheers 2buyornot2buy

I bought close to the Newtownabbey area

Edited August 20, 2012 by tinbin

[tinbin]

Thanks for that story and good on you for not capitulating.

Been there in the past with the phantom bidders and the laughing aloud at you in the EA office to make you look/feel stupid only to have them come back later when you don't go along with what they wanted. It's all very well preaching to the converted on here but you really have to be prepared for the assault you may come under and you will doubt youself, having someone laugh out loud and shake their head at your "idiocy" isn't something that you normally have to deal with in life and it will have some impact, if you have a slightly less than convinced partner keep them away from this end of things or you'll end up with it from all sides if they have even a kink of doubt.

I will be posting at some point with some similar EA dealings (selling & buying) but I'm going to save it until the end which may be years away the way things are working out.

I think you have hit the nail in the head, I had moments when I questioned if I was doing the right thing playing hard ball. Mrs.Tinbin nearly dropped on the spot when she overheard me reducing the offer by 5%!! I can laugh about it now but it was anything but funny at the time. If I had got a £1 for everytime I told her to trust me I would be a millionaire!

My advice to anyone in a similar situation is just stick to your guns. I have taken many a piece of advice from posters on here which helped me along the way. Doccyboy sums it up in a nut shell for me though ... there will always be another house, thats what I told myself the whole way through the process so if it happened it happened, if it didnt it didnt. I thought of it like a business transaction ... I accept and understand that it is easier said than done but its the only way you can stop the heart ruling the head in these situations.

[Realistic NI EA]

Good on you for buying a house that you will be happy in for many years at a price that lets you sleep easy at night. The old phantom bidder is a common occurence whether buying repos or by private treaty. I am not trying to make myself out as a saint but I've never made up a phantom offer to trick the other party into raising their offer. My feeling is that it could just as easily go the other way where they pull out so you are left with no buyers after trying to trick your only buyer into paying more. We deal in a load of repos so I know what you've been through but spare a thought for the good EAs like us who never know if the sale will go through or someone will come in before exchange of contracts with a higher offer, putting us back to square one and another 2 months from a commission on the sale. I would rather the house be agreed to the buyer who put in the fair offer and them be given exclusive rights to get to exchange of contracts within a strict time period, say 28 days otherwise it goes back on the market. It's the not knowing if someone will gazump you at the last minute that must give some buyers sleepless nights.

Anyway, well done again especially for beating the EA at their game and buying a nice home at a cracking price.

[Vespasian]

Congrats man

Nicely done

We've seen about a dozen houses so far but haven't bid yet, I'll be showing Mrs Vesp your post

[Ride_on]

I must admit at this point I thought it was a done deal and pretty much just forgot all about the property but to my surprise I received a call from the EA several weeks after this episode, it went along the lines of ... good news for you, bad news for me.. yada, yada, yada. The other party couldn't get a Mortgage so your offer is back on if you are willing to proceed and the Repossession Company are happy to go with you. As far as he was concerned I was just going to go .. 'no bother thanks for the call. Can we call it a deal then??' ... I had a different ideas and told him I was still interested but my offer was now 5% less. Probably in hindsight I should have dropped it by 10% as things had shifted massively in my favour. Once again the silence on the phone spoke for itself...

Feckin perfect, exactly what I did in 1990, exactly same comments from the EA 'They will never accept that'. Your kung Foo is strong, use it wisely.

[YoungFTB]

We deal in a load of repos so I know what you've been through but spare a thought for the good EAs like us who never know if the sale will go through or someone will come in before exchange of contracts with a higher offer, putting us back to square one and another 2 months from a commission on the sale. I would rather the house be agreed to the buyer who put in the fair offer and them be given exclusive rights to get to exchange of contracts within a strict time period, say 28 days otherwise it goes back on the market. It's the not knowing if someone will gazump you at the last minute that must give some buyers sleepless nights.

So does that mean that if someone puts in a higher offer then does the 28 days till exchange reset and it'll take another 28 days for the contract to be agreed?

[Ausdave]

So does that mean that if someone puts in a higher offer then does the 28 days till exchange reset and it'll take another 28 days for the contract to be agreed?

no and yes. In reality you are unlikely to be gazumped by anyone barr a cash purchaser.

[YoungFTB]

no and yes. In reality you are unlikely to be gazumped by anyone barr a cash purchaser.

Right I see, what is it about a cash buyer that trumps a mortgage buyer? Is it because a cash buyer is not subject to the terms and conditions that a mortgage buyer would be?

I have another question, if a mortgage buyer wants to buy a repo will the mortgage company insist on a survey being done on the repo property and them being satisfied with the survey before releasing funds to purchase a repo?

[BelfastVI]

Right I see, what is it about a cash buyer that trumps a mortgage buyer? Is it because a cash buyer is not subject to the terms and conditions that a mortgage buyer would be?

I have another question, if a mortgage buyer wants to buy a repo will the mortgage company insist on a survey being done on the repo property and them being satisfied with the survey before releasing funds to purchase a repo?

with a lot of repo houses (not all). there will be problems with title documentation and the house may be wreaked. Boilers gone and I have heard of bags of cement emptied down the sewers.

A valuer will be very fearful of it and your Solicitor will be very fearful of giving a report on title and there may be no solicitor on the other side. There will be the banks solicitor but not the Solicitor who handled the purchase for the original owner. Its a bigger issue in America as certain state bills etc go with the property over there.

Quite often the price reflects all this and if you have your wits about you you can nab a bargain. Particularly if you know the house/street etc.

The warning lights come on when the vendor is put off that your acceptable price comes via a mortgage. You have to ask yourself why is he unhappy about that.

On the new-build side we, believe it or not, prefer a stranded mortgage sale. Someone coming on saying they are a cash buyer firstly believes we should be laying rose petals on the floor in front of them as they walk around the house. Secondly they believe their money on completion day is worth far more than someone else who pays via a mortgage and therefore expects a massive discount and all extras free. And thirdly, 9 times out of 10 turns out not to have the cash for the house as the bank is surprisingly not happy that they turn their own (mortgaged house) into a rental property.

[squire]

with a lot of repo houses (not all). there will be problems with title documentation and the house may be wreaked. Boilers gone and I have heard of bags of cement emptied down the sewers.

A valuer will be very fearful of it and your Solicitor will be very fearful of giving a report on title and there may be no solicitor on the other side. There will be the banks solicitor but not the Solicitor who handled the purchase for the original owner. Its a bigger issue in America as certain state bills etc go with the property over there.

Quite often the price reflects all this and if you have your wits about you you can nab a bargain. Particularly if you know the house/street etc.

The warning lights come on when the vendor is put off that your acceptable price comes via a mortgage. You have to ask yourself why is he unhappy about that.

On the new-build side we, believe it or not, prefer a stranded mortgage sale. Someone coming on saying they are a cash buyer firstly believes we should be laying rose petals on the floor in front of them as they walk around the house. Secondly they believe their money on completion day is worth far more than someone else who pays via a mortgage and therefore expects a massive discount and all extras free. And thirdly, 9 times out of 10 turns out not to have the cash for the house as the bank is surprisingly not happy that they turn their own (mortgaged house) into a rental property.

That's a nice insight BelfastVI.

BinTin, well done and congratulations on your new home. I hope you'll be happy there for many years.

I think as others have said, you absolutely have to be prepared to walk away and your story is one great example.

[Ausdave]

Right I see, what is it about a cash buyer that trumps a mortgage buyer? Is it because a cash buyer is not subject to the terms and conditions that a mortgage buyer would be?

I have another question, if a mortgage buyer wants to buy a repo will the mortgage company insist on a survey being done on the repo property and them being satisfied with the survey before releasing funds to purchase a repo?

If you're a cash purchaser get a good survey on a repo.

If you're taking a mortgage, you'll need a bank valuation to ensure they will mortgage for the amount.

Aside from this pay for a survey. Various levels, if house old get full structural survey.

Because services are turned off on a repo your survey will reveal a red flag/traffic light (of concern or requiring immediate attention) on plumbing, electrics, gas etc.

Generally bank inflexible, won't allow services to be connected even if you offet to pay all charges involved.

You take a chance, reflected in the price.

We got a builder to give things a once over and give his impression which gave us reassurance.

Didn't get a spark to turn the electrics on, guy from NIE came out and reconnected and then with crossed fingers I flicked the breaker.

Got a plumber to recommission heating and turn water on.

Almost every radiator spang a leak and so did the toilets so it was good to have someone there with all the kit.

You'll probably find debt to the address aswell, you're not liable for it but it's a pain in the ****.

Recommend getting yourself on the electoral register - adds weight to your protestations to debt collectors who come calling.

[YoungFTB]

with a lot of repo houses (not all). there will be problems with title documentation and the house may be wreaked. Boilers gone and I have heard of bags of cement emptied down the sewers.

Seriously? Cement down the sewers? Who does things like that, the people who had their house repossessed is it?

The warning lights come on when the vendor is put off that your acceptable price comes via a mortgage. You have to ask yourself why is he unhappy about that.

I think I follow, is this why many repos are asking for cash offers on PropertyNews & PropertyPal? I.e. quick sale and no chance of a mortgage falling through? I phoned up about a property today and it was now a cash offer buy only, turns out the house went Sale Agreed with a mortgage offer and then it fell through as the surveyor report returned with damp issues so they couldn't get the mortgage for the property and the sale fell threw.

And thirdly, 9 times out of 10 turns out not to have the cash for the house as the bank is surprisingly not happy that they turn their own (mortgaged house) into a rental property.

In my search for a property I've spoken to quite a lot of Estate Agents and most of them are now asking for proof of funding if it's a cash offer due to the number of people who are just coming along claiming they are cash buyers and then when it comes to completion time they don't have the funds and drop out which is obviously wasting the Estate Agents time.

That's really interesting, about how they claim to be cash buyers.

Thanks very much for the info BelfastVI!

[YoungFTB]

If you're a cash purchaser get a good survey on a repo.

If you're taking a mortgage, you'll need a bank valuation to ensure they will mortgage for the amount.

Aside from this pay for a survey. Various levels, if house old get full structural survey.

Because services are turned off on a repo your survey will reveal a red flag/traffic light (of concern or requiring immediate attention) on plumbing, electrics, gas etc.

Generally bank inflexible, won't allow services to be connected even if you offet to pay all charges involved.

You take a chance, reflected in the price.

We got a builder to give things a once over and give his impression which gave us reassurance.

Didn't get a spark to turn the electrics on, guy from NIE came out and reconnected and then with crossed fingers I flicked the breaker.

Got a plumber to recommission heating and turn water on.

Almost every radiator spang a leak and so did the toilets so it was good to have someone there with all the kit.

You'll probably find debt to the address aswell, you're not liable for it but it's a pain in the ****.

Recommend getting yourself on the electoral register - adds weight to your protestations to debt collectors who come calling.

That's some great advice, thanks Ausdave!

[OptimusSubPrime]

That's some great advice, thanks Ausdave!

Not always will there be as much to do with the house. We bought a repo this time last year.

Upon buying...

Plumbing: The water was only turned off at the valve under the sink, so no problem there, just bled the radiators. Hot press needed reconnecting but it was only one wee pipe that had to get put back on, not a big deal.

Electrics: Only the trip switch flicked off and an electric top up needed.

Potential Damage to house: None at all. Only some possessions of the former owners which hadnt been taken away. Quick call to charity shop had it all collected and the rest binned.

Unwanted letters etc: Some for a wile, our postman i think filtered a lot of these away after we handed him a reck of them with Return to Sender on them.

All in all, we probably got off pretty lightly. Delighted with how it went, even though there was a few shaky moments when we thought someone was gonna gazump us after our offer accepted. Thankfully the bank rejected the higher offer to stick with ours.

Good luck with whatever you decide to go with, my advice would be, if its the right house dont be afraid to go for it. But at the same time, dont get emotionally attached to 'the one'. There will be others that tick the boxes too!

[YoungFTB]

Not always will there be as much to do with the house. We bought a repo this time last year.

Upon buying...

Plumbing: The water was only turned off at the valve under the sink, so no problem there, just bled the radiators. Hot press needed reconnecting but it was only one wee pipe that had to get put back on, not a big deal.

Electrics: Only the trip switch flicked off and an electric top up needed.

Potential Damage to house: None at all. Only some possessions of the former owners which hadnt been taken away. Quick call to charity shop had it all collected and the rest binned.

Unwanted letters etc: Some for a wile, our postman i think filtered a lot of these away after we handed him a reck of them with Return to Sender on them.

All in all, we probably got off pretty lightly. Delighted with how it went, even though there was a few shaky moments when we thought someone was gonna gazump us after our offer accepted. Thankfully the bank rejected the higher offer to stick with ours.

Good luck with whatever you decide to go with, my advice would be, if its the right house dont be afraid to go for it. But at the same time, dont get emotionally attached to 'the one'. There will be others that tick the boxes too!

Thanks mate!

[BelfastVI]

Not always will there be as much to do with the house. We bought a repo this time last year.

Upon buying...

Plumbing: The water was only turned off at the valve under the sink, so no problem there, just bled the radiators. Hot press needed reconnecting but it was only one wee pipe that had to get put back on, not a big deal.

Electrics: Only the trip switch flicked off and an electric top up needed.

Potential Damage to house: None at all. Only some possessions of the former owners which hadn't been taken away. Quick call to charity shop had it all collected and the rest binned.

Unwanted letters etc: Some for a wile, our postman i think filtered a lot of these away after we handed him a reck of them with Return to Sender on them.

All in all, we probably got off pretty lightly. Delighted with how it went, even though there was a few shaky moments when we thought someone was gonna gazump us after our offer accepted. Thankfully the bank rejected the higher offer to stick with ours.

Good luck with whatever you decide to go with, my advice would be, if its the right house dont be afraid to go for it. But at the same time, dont get emotionally attached to 'the one'. There will be others that tick the boxes too!

Good advise. I would also add. With Repo's don't skimp on the legal advice.

[YoungFTB]

Good advise. I would also add. With Repo's don't skimp on the legal advice.

Any advice on that front? One or two estate agents I spoke to seemed overly keen on directing me to Solicitors they knew that didn't charge a fee if the buyer was gazumped at the last minute.

[2buyornot2buy]

Any advice on that front? One or two estate agents I spoke to seemed overly keen on directing me to Solicitors they knew that didn't charge a fee if the buyer was gazumped at the last minute.

Not worth it if their % fee is scary. Seriously talk to a small local firm. They'll be best placed to handle this.

Do not use ANY legal or financial service recommended by the EA or developer. They are out to benefit themselves not you. Shop around.

[nigooner]

Any advice on that front? One or two estate agents I spoke to seemed overly keen on directing me to Solicitors they knew that didn't charge a fee if the buyer was gazumped at the last minute.

The EA gets a referral fee from the solicitor or sending work their way.