Two Week to Sign Missives!!

[adonaghy]

Hi, so my offer on a two bed house repossession has been accepted.......under the condition I conclude missives in ywo weeks with a date of entry approximately 4 weeks.

My solicitor says this is not unusual for repossessions, but if I dont have the 'mortgage offer' by two weeks I would need to back out or incur costs.

I dont see my credit history/rating being a problem and I have a good 25% deposit, but is it likely the bank will be able to fulfill this in the timescale and would the 'owner' really back out to find a new buyer if it cant come in on time?

Any words of wisdom greatfully received.

[Richlist]

I don't know how things work in the wannabe independant Scotland but here in England.....its not recommended to bid on auction property without having your finances firmly in place. Banks don't usually move that quickly so bridging finance is often used and can be arranged by the auctioneers.

[adonaghy]

I made an offer on the property via an estate agent and not an auction. That said, has anyone had any experience of buying a repossession and had to back out due to bank being unable to deliver or having seller give more time?

Thanks.

[Richlist]

I've bought a few through estate agents......although not recently.

Normally the agent makes a lot of effort to ensure any interested buyer has finances already in place in order to complete within the tight deadlines presented by repossessions. In my case.....every time.... the estate agent wanted proof and I seem to remember giving them sight of my bank statement showing a balance in excess of the purchase price. Note.....this is all relative to the UK not Scotland.

You need to talk to your bank urgently to establish wether they can meet the strict timetable. If they can't you will need bridging finance asap.

[adonaghy]

Thanks, i saw my bank mortgage adviser last week and she thought id have no problem getting a BTL mortgage . I have an appointment tomorrow to see her and ask her to process my application (I bank with them and they have full details of my finances). I assume I just need the 'mortgage offer' in place for missive signature in two weeks and money available for approx five weeks at entry date. So how does a bridging loan work? Bank said they would process application as urgent but wouldnt commit more than that.

[Richlist]

Its similar to an overdraft and used for short term financing. The interest rate is usually quite high which provides the user with an incentive to arrange normal financing ( eg a mortgage) asap.

Talk to your bank......in the current economic climate there may be additional restrictions, barriers or lack of willingness to lend.

There is always the pawn shop.

I watched a program on TV last week where a guy was using his helicopter worth around £2.5 million to raise £1 million from the pawn shop in order to finance a 'not to be missed' property deal. You may not have a helicopter but you may have other assets that can be used to raise short term finance.

[Melboy]

I've have bought many repo's and the tried and trusted written offer format to secure the deal is.... and still is, to state your finances are in place and show this to be a fact and the name and address of you solicitor.

In my experience it is not always the highest price offered that wins the deal it is the ability to proceed quickly and swiftly to complete the transaction. Fastest I have ever completed was 10 days but most repo. deals are normally 28 days.

Scotland, of course, is totally different to England

[adonaghy]

Thanks for all you advice, sincerely.

Im going to ask my bank to remortgage a property I already own and is let out (it currently has no finance against it.9 Not quite a helicopter, but it will do ). I became an incidental landlord with this property as it had been my home.

I will proceed on current property if they can deliver on time. If this fails i can keep the sum raised and available for a future purchase as 'cash is king' a wise man told me.