Buying from banks (repossessed properties)

[Plumber Newcastle]

I am in the process of buying some properties in the North East (well at least I think I am)...but I am being given the run-around by the vendor (a bank who has repossessed the properties) as they have accepted prices twice and then reneged. Obviously I just have the estates agents word on this...do you think the agent is giving me the run-around in order to increase the price...accepting then pulling out and asking for an increased offer?

[FazLondon]

Hi

Good post and a very good question.

I have purchased many repossessions in London in recent months. Estate Agents are the most slippery people on the planet (think Foxtons).. If we were all animals, they would be snakes (the venomous ones)

Normally, they tend to have relationships with many investors who operate in the area. If a repossession comes up and there is an opportunity to get a good deal, they will already have an investor in mind. The normal procedure for this is by way of a 'drink' (a 'back hander'). The Agent will accept the fee in exchange for delivering the deal for a lower price. If you have put a £150,000 offer on a property and he has a £90,000 offer from someone who is giving him £5,000, he will no doubt take the lower offer.

I hope this helps. Hate to say it, but it is a very common practice. The only reason they market the property openly is because they have to, by law, achieve the best price for the Bank. I'm sure if they had discretion in this matter, they wouldnt even openly market the properties. Most of the time, it has already been sold before they start marketing it

Best regards,

Faz

[Dan_Manchester]

I guess it's sad but true on the above, I had the run around last year when buying a repo from an estate agent and vowed never to bother again.

Whilst Auction's are risky at least when the hammer falls you owe the property and assuming the auctioneer isn't taking bids from the walls (perhaps stand near the back so you can see the other 'bidders'?) then you will pay a 'fair' price in a timely manner.

Good luck

[drhouse]

Originally Posted by FazLondon

Hi

Good post and a very good question.

I have purchased many repossessions in London in recent months. Estate Agents are the most slippery people on the planet (think Foxtons).. If we were all animals, they would be snakes (the venomous ones)

Normally, they tend to have relationships with many investors who operate in the area. If a repossession comes up and there is an opportunity to get a good deal, they will already have an investor in mind. The normal procedure for this is by way of a 'drink' (a 'back hander'). The Agent will accept the fee in exchange for delivering the deal for a lower price. If you have put a £150,000 offer on a property and he has a £90,000 offer from someone who is giving him £5,000, he will no doubt take the lower offer.

I hope this helps. Hate to say it, but it is a very common practice. The only reason they market the property openly is because they have to, by law, achieve the best price for the Bank. I'm sure if they had discretion in this matter, they wouldnt even openly market the properties. Most of the time, it has already been sold before they start marketing it

Best regards,

Faz

My God I feel really sorry for you if you live in an area with these sorts of people. I have been an Estate Agent for years and don't know any agents who behave like this - I am not saying they don't exist - just that they are in a minority. That said I have been offered 'sweeteners' by some buyers which I have refused and after that I tended to avoid doing business with them. Of course when a repossession comes on or something needing work we do have investors/developers we inform but we have lots of others buyers as well. The last repo I sold didn't need a lot of work and sold to a first time buyer for the valuation price.

You seem to forget it is NOT the agent who is the vendor and they can't accept any offer, only the seller can do that. I have had repos in the past and got lower offers which the banks etc have rejected. They always have a surveyor value as well as 2/3 estate agent values and it is my understanding that this info has to be available to the repossessed vendor as a justification for the sales price.

If you have made a higher offer than what the property sells for then complain to the financial institution involved or the Ombudsman. Tarring all agents with the same brush is unfair but it is not uncommon if a buyer has made a low offer and then loses out to a higher offer from someone else