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Barnard Marcus 8th December 2008


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Not seen this today but here are the results.

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This lot is very close to where I live. I cannot understand why HBOS did not take 190k for it ????

Lot in E16

Caution perhaps.

If it's being sold by the mortgagee in possession it's often difficult to establish a fair market price. This may be the first time of offering, by next auction they can easily demonstrate that they've made every effort to sell at its market value and thus avoid any claim from the mortgagor.

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I was thinking the same - a lot of unsold properties seemed to get very close to the reserve price without meeting it, so I can only assume that most or all of the bids were fabricated.

Although such bids would not help a mortgagee in possession.

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Not seen this today but here are the results.

Results

This lot is very close to where I live. I cannot understand why HBOS did not take 190k for it ????

Lot in E16

thats easy, banks are incredibly greedy. I made an offer of 170k at the end of march this year for a property in Farndon, the bank said "no chance".

Last month I had a call from the agent saying the bank would accept 150k as I am a cash buyer, I said "no chance"

butt holes the lot of them, thing that really annoys me is that it was probably repo'd over a few grand now the bank will spend eternity chasing the difference. They create there own losses through sheer greed and stupidity and we pay the price through higher charges.

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They would if someone was foolish enough to bid "just a thousand more" as the hammer is going down, which is obviously the idea. Presumably it works sometimes.

Potentially it could backfire though - and badly.

Someone selling a repossessed property has to establish that they sold it at fair value in order to avoid the accusation of selling it too low. The generally accepted way to do this is to publicise it for sale either locally (and auction) or in the case of some specialist asset e.g. a windmill in "Windmills Weekly."

Furthermore, if they fail to sell it for something close to its accepted value and then subsequently sell it for much less this again can be grounds for a claim - failing to mitigate a loss. For example, if a house is shown to be worth about £100k but the bank refused an offer of £94k at auction, and the subsequently sold it for say £60k the person who owed them money could rightly argue that they don't owe the difference (or intererest on) the sum between £60k and £94k because the bank was shown to refuse a reasonable offer.

Having as your defence that there never was an offer for £94k because the auctioneer was taking bids of the wall may be very hard to prove.

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I was thinking the same - a lot of unsold properties seemed to get very close to the reserve price without meeting it, so I can only assume that most or all of the bids were fabricated.

I suspected this too.

I have noticed that often straight after the auction, where properties have supposedly got close to the reserve price, they are then advertised on the auction site, as being available at only a small amount over the bid they are supposed to of just got at auction. e.g. I saw a couple advertised as being available at only £1000 above the last bid, and often it is £2-£5k.

So I can't understand why it would not be worth letting it go at auction, if they were only looking for such a small extra on the price straight after the auction.

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I suspected this too.

I have noticed that often straight after the auction, where properties have supposedly got close to the reserve price, they are then advertised on the auction site, as being available at only a small amount over the bid they are supposed to of just got at auction. e.g. I saw a couple advertised as being available at only £1000 above the last bid, and often it is £2-£5k.

So I can't understand why it would not be worth letting it go at auction, if they were only looking for such a small extra on the price straight after the auction.

Because, as I explained in my previous posting the mortgagees are anxious to avoid being accused of not getting fair market value. Failing to sell at auction, then re-advertising and accepting a similar offer is proof of a genuine attempt to establish the proper price of the property - nothing suspicious about this at all - it happened all the time in the last recession and will happen in this one too.

[edit]

Selling a property this way is what will drive house prices down - markets are made at the edges - in this case by forced sellers.

Edited by happy?
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Because, as I explained in my previous posting the mortgagees are anxious to avoid being accused of not getting fair market value. Failing to sell at auction, then re-advertising and accepting a similar offer is proof of a genuine attempt to establish the proper price of the property - nothing suspicious about this at all - it happened all the time in the last recession and will happen in this one too.

[edit]

Selling a property this way is what will drive house prices down - markets are made at the edges - in this case by forced sellers.

From what you say there, seems to explain why we are now seeing quite a few properties returning to auctions.

I assume an auction fee has to be paid whether the property sells or not? Any idea how much an auction fee is?

If it is a repossesion, would this fee be added by the bank to the debt of the original owner ?

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Not seen this today but here are the results.

Results

This lot is very close to where I live. I cannot understand why HBOS did not take 190k for it ????

Lot in E16

I sold an identical house to that one about 100 yards away from it , exactly one year ago today for £300,000. Could not believe it went to exchange and completion without my buyers asking for a discount , as Northern Rock was on the telly every night then.

Yes i'm surprised they did not accept the 190k , thought it might make !75k i.e. below the stamp duty threshold and that that would have been accepted.

Why are the guide prices so far away from the reserves. It was guided at 150k + final bid 40 higher than that and remains unsold . It was one of many unsold lots where the final bid was way higher than the guide.

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There has been some confidence restored back into the market there are loads of examples, about a 2 month ago, you could definately see a trend back to 2002 prices. We are definately moving away from that now.

Definately? Not seeing confidence in my manor. Two of our local estate agents are having an END OF YEAR SALE this weekend! Reduced property prices in the style of Allied Carpets. Amazing.

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I suspected this too.

I have noticed that often straight after the auction, where properties have supposedly got close to the reserve price, they are then advertised on the auction site, as being available at only a small amount over the bid they are supposed to of just got at auction. e.g. I saw a couple advertised as being available at only £1000 above the last bid, and often it is £2-£5k.

So I can't understand why it would not be worth letting it go at auction, if they were only looking for such a small extra on the price straight after the auction.

I attended this auction yesterday out of interest.

One thing struck me as very odd. There were 200 seats and at least a similar number standing, so very well attended. However, after about 90 minutes, the numbers dropped drastically, I would estimate over half of the attendees had left.

It was clear that on certain properties the guide price bore no relation to the reserve, so I wonder if the potential bidders voted with their feet for that reason.

The phrase "I can't sell it for that" or "my customer needs more for it than that" were uttered consistently by the auctioneers throughout the morning.

The second auctioneer mentioned after several lots that the owners were often keen to negotiate after the event at less than the reserve price, but the negotiations desk was quiet all the time I was there. There were about 6 besuited gel-heads standing on the podium waiting to escort winning bidders to the contracts desk. They were largely unemployed for the morning.

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Not seen this today but here are the results.

Results

This lot is very close to where I live. I cannot understand why HBOS did not take 190k for it ????

Lot in E16

This is my first ever message and I am trying to see if I can post anything successfully. Have to start somewhere! As for this particular topic, I always wonder if the Bank behaves differently in the following two cases:

1. Property now worth 150k and the Borrower owes only 100k

2. Property now worth 150k and the Borrower owes 250k (say one of those City-centre brand new flats bought with 100% for 250k)

Would be good if there is someone who knows the decision-making process adopted by these banks.

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Not seen this today but here are the results.

Results

This lot is very close to where I live. I cannot understand why HBOS did not take 190k for it ????

Lot in E16

2007-10-10 31 Apartment, 196 Manor Court, Altrincham Road, Manchester, Greater Manchester, M22 4RZ£125,757

  • icon-flat.gif

  • icon-leasehold.gif

  • icon-newbuild.gif

  • icon-viewmap.gif

http://www.eigroup.co.uk/auctioneers/templ...rn&l=524440

Not bad going sold for less than 50% a year after being bought ;) LOT 182

Edited by thebigcorrection
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2007-10-10 31 Apartment, 196 Manor Court, Altrincham Road, Manchester, Greater Manchester, M22 4RZ£125,757

Not bad going sold for less than 50% a year after being bought ;) LOT 182

:lol: ....SOLD for 60.5k , so the owners were paying more than 1k a week rent to the bank in a little over a year :rolleyes:

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This is my first ever message and I am trying to see if I can post anything successfully. Have to start somewhere! As for this particular topic, I always wonder if the Bank behaves differently in the following two cases:

1. Property now worth 150k and the Borrower owes only 100k

2. Property now worth 150k and the Borrower owes 250k (say one of those City-centre brand new flats bought with 100% for 250k)

Would be good if there is someone who knows the decision-making process adopted by these banks.

In both cases the bank has to get an order for possession from a county court judge, before the property can be sold. An order for possession can be suspended by a court i.e. just because someone is in arrears it does not follow that they are automatically removed from the property, a court will make an order for possession and suspend if there's a reasonable prospect that the person can clear the arrears and continue to pay the mortgage, or where the defendant has significant equity in the property. So in example 1 above (£50k equity) they court is unlikely to make an order for possession without suspension - this property probably wouldn't come to auction unless there were other compelling reasons.

Typically an order for possession would be something like "possession of the property at xxxx suspended on payment of the mortgage at £x per month and arrears of £xxx at £yyy per month." This is how a court would treat someone who is in arrears on their own home. They would treat a BTL landlord on their BTL properties very differently as this is a business debt. The court would be under no obligation to consider the impact of repossession on the BTL landlord as the property is not their primary residence.

In the event that there is no realistic prospect of the debt being repaid the court will issue an order - even then the mortgagee has to take action to bring about a sale. In selling the property the mortgagee has to dispose of it at fair market value, if the mortgagee fails to sell at market value then the mortgagor can sue them as it's incumbent upon the mortgagee to mitigate their loss. So the mortgagee is on the guard against being accused of selling the property below its market value. As we all know in an unstable market (or one in freefall as we have now) it's very difficult to establish the true value of a property. To get around this problem the mortgagee will seek to achieve maximum publicity e.g. put the house up for sale at 2-3 estate agents and then offer it at auction close to a surveyor's valuation. If it doesn't reach the reserve the best option may be to withdraw it from sale and re-advertise and re-auction. In this way the mortgagee has a reasonable defence to a claim they sold below its value i.e. they made several attempts to sell it before accepting any reasonable bid.

A mortgagee also has to take into account all the time they fail to sell a property in a falling market that they run the risk of being accused of setting the price too high which again would be a reason for the mortgagor to deny responsibility for the debt or a portion of it. Suppose, in your example 2 above the house is worth about £150k if the mortgagee puts it up for sale at an unrealistic price (e.g. £900k) it will never sell, meanwhile the market drops further and the house is now only worth £100k, the mortgagee can't then sell it for £100k and claim the outstanding debt of £150k from the mortgagor. The mortgagor can again claim that the mortgagee failed to mitigate their loss and that £50k of the debt was the result of the mortgagee asking an unrealistic price - a case like this becomes compelling where there is evidence that someone was willing to buy it for something close to its value of £150k. This was my reason for saying taking bids off the wall at auction could backfire. A smart lawyer acting for the mortgagor would use this as evidence that the property should have been sold at that point, the onus would then be on the mortgagee to prove that in fact there was no bid and that the auctioneer was taking bids off the wall.

This is my understanding of it but I'm not a lawyer and I don't give advice!

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In both cases the bank has to get an order for possession from a county court judge, before the property can be sold. An order for possession can be suspended by a court i.e. just because someone is in arrears it does not follow that they are automatically removed from the property, a court will make an order for possession and suspend if there's a reasonable prospect that the person can clear the arrears and continue to pay the mortgage, or where the defendant has significant equity in the property. So in example 1 above (£50k equity) they court is unlikely to make an order for possession without suspension - this property probably wouldn't come to auction unless there were other compelling reasons.

Typically an order for possession would be something like "possession of the property at xxxx suspended on payment of the mortgage at £x per month and arrears of £xxx at £yyy per month." This is how a court would treat someone who is in arrears on their own home. They would treat a BTL landlord on their BTL properties very differently as this is a business debt. The court would be under no obligation to consider the impact of repossession on the BTL landlord as the property is not their primary residence.

In the event that there is no realistic prospect of the debt being repaid the court will issue an order - even then the mortgagee has to take action to bring about a sale. In selling the property the mortgagee has to dispose of it at fair market value, if the mortgagee fails to sell at market value then the mortgagor can sue them as it's incumbent upon the mortgagee to mitigate their loss. So the mortgagee is on the guard against being accused of selling the property below its market value. As we all know in an unstable market (or one in freefall as we have now) it's very difficult to establish the true value of a property. To get around this problem the mortgagee will seek to achieve maximum publicity e.g. put the house up for sale at 2-3 estate agents and then offer it at auction close to a surveyor's valuation. If it doesn't reach the reserve the best option may be to withdraw it from sale and re-advertise and re-auction. In this way the mortgagee has a reasonable defence to a claim they sold below its value i.e. they made several attempts to sell it before accepting any reasonable bid.

A mortgagee also has to take into account all the time they fail to sell a property in a falling market that they run the risk of being accused of setting the price too high which again would be a reason for the mortgagor to deny responsibility for the debt or a portion of it. Suppose, in your example 2 above the house is worth about £150k if the mortgagee puts it up for sale at an unrealistic price (e.g. £900k) it will never sell, meanwhile the market drops further and the house is now only worth £100k, the mortgagee can't then sell it for £100k and claim the outstanding debt of £150k from the mortgagor. The mortgagor can again claim that the mortgagee failed to mitigate their loss and that £50k of the debt was the result of the mortgagee asking an unrealistic price - a case like this becomes compelling where there is evidence that someone was willing to buy it for something close to its value of £150k. This was my reason for saying taking bids off the wall at auction could backfire. A smart lawyer acting for the mortgagor would use this as evidence that the property should have been sold at that point, the onus would then be on the mortgagee to prove that in fact there was no bid and that the auctioneer was taking bids off the wall.

This is my understanding of it but I'm not a lawyer and I don't give advice!

When it comes to selling, my view is that in the case where the Borrower still has some equity, the Bank tends to be more cautious - I don't know if this is because there is somebody "watching" (the Borrower must be watching) or if this is because the Bank knows that there is still equity which it can debit its monthly interest from (at default rate!?!) and hence it can sell cautiously.

On the other hand, if it is clear that there is no equity left, I seem to have the impression that the Bank seems "couldn't care less" and will knock it down at whatever price at the auction . It seems that the Bank is saying "OK the mortgage debt is £250k, the property is worth £150k, but I can't be bothered to sell it slowly by the law books, I am to sell it tomorrow for £100k - the way we like it - and the difference you owe us will be £150k instead of £100k but so what, a £150k debt will bankrupt you but a £100k debt will bankrupt you too - either way you are bankrupt - what can you counterclaim and sue us for!"

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  • 439 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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