Sell or Repossession

[peteepetee]

Hello. I hope someone can help. Is a house likely to be sold for more if it is repossessed and sold on by the mortgage company or if is sold to one of those companies for 75% of its value who let you stay and rent back. My ex wife is facing reposession (again). She wants to sell it to one of those companies. Although I don't have the figures I'm not sure it will clear enough for her to give me the money I have charged on the house (it was due to me when my youngest is 18). Is it likely to make more if it is repossessed and sold on by the morngage company? I have to give my permission for her to sell and don't know what the best option os for myself. (My youngest is 18 within the next couple of months, is going to uni and would be just as happy to live with me again if needed be so I am basing the decision entirely on what is best for me). I would be very grateful if anyone could offer me an some advice. Thank you. Pete

[themas]

1. There are a lot of dodgy outfits doing sale & rent back. Many only give a 12 month tenancy & there is absolutely no certainty that you won't be evicted when that tenancy ends. Also, she may well find she can't get Housing Benefit to help with the rent, if that is what she wants to do. General advice - be very very careful & get detailed advice from CAB or a solicitor before going ahead.

2. If you can use the above to put her off the idea, then you could propose putting the house on the market before it is repossessed. That way you will get the best price for it. She will have to find somewhere else to live, but that's going to happen if you don't agree the sale & rent back because it will be repossessed.

3. I don't know the answer to your question, & doubt whether anyone can tell you. But it could well be that the value the sale & rent outfit uses & offers 75% of is not a proper full market value anyway.

[peteepetee]

Thank you for taking the time to reply. it's an unfortunate situation made worse by the fact that she will not talk to me. All the information I have has come through one of my children. She tends to bury her head in the sand until it's too late. I apologise if I sound harsh but i'm past caring what happens to her.

Perhaps if she put it on the market for a good bit under market value it would sell pretty quickly. I think it's unlikley she'll listen even if I could contact her to advise. She does not have a solicitor (the buy rent people are suppling one for free(!)).

If a house is repossessed what percentage of market value do they earn on avarage when they are auctioned off? If I'm going to loose money I want to loose the smalles amount that I can. She does not intend to work so shes not bothered about getting any money as she would have to spend it before she gets benefits anyway. I am sad it has come to this and appreciate any help that is given

[sandmaster]

As Themas says - the option to sell and rent back is fraught with danger. If they offer 75% of valuation it means nothing - their valuation may be far lower than true market value, you will get only 75% of that, less costs (which may be very high) and your ex will have a very tenuous right of occupation. As soon as the market recovers you can be sure the rental agreement will end and she will be homeless.
I cannot advise you, but if I were in this situation I would refuse to sign anything other than perhaps an agreement with a local estate agent to market the property.
If the mortgagee seeks repossession it is out of your hands anyway.

[ummmm]

It depends on how much equity is in the house?

I had a quite a bit in mine but could no longer afford the mortgage. I spoke to the bank and put it on the market for about 20k under market value. It sold in a week.

Obviously you can only do that if you have the equity.

[peteepetee]

Hi all. Thankyou for your answers. Today I have contacted a couple of local estate agents who have valued the property at just over �200,000. Obviously this is without seeing the house but knowing the type, what they have sold there before and the local markets. She owes about �100,000 including her arrears and I am owed around �40,000. I think the best thing would be like ummmm said that it goes on the market cheap and seels quick. Sadly it is not my choice and she won't listen to advice if it has come from me. She is not interested in how much she gets as she has no intention of returung to work so would only have to spend it on rent before she could claim benefits. She would also be more than happy to see me end up with none of my money. She wants to stay in the house so I don't think will agree to sell it properly. She will no listen to a logical argument that if they don't offer enough she will lose it to reposession.

All I can do I think is see how much this company offer her and if it is enough to cover my money and my solicitor agrees I will have to sign. If she ends up homeless it is entirely of her own engineering in an attempt to see me with nothing and I will have no symapthy for her.

If they don't offer enough I guess we just have to see how a sale after repsession goes. I can't make her put it on the market and it is so frustrating. I am so angry at her, this has been done entirely on puropse. Thankyou all for taking the time.

[themas]

There is no way of knowing for certain, but if the market value is truly �200K & the total owed about �140K then I would think it unlikely that sale after repossession would be at such a low price that you would not get your money back.

If you decide to go ahead with the sale & rent back make certain you have a water tight written commitment to the amount you will get before signing.

Your ex is being very foolish if she thinks she can do this sale & rent back & then just go & get housing benefit to help with the rent. The normal rule is that you cannot get such help if you are renting a house which you sold in the last 5 years. There are exceptions to this, but you have to be able to show that you had absolutely no alternative but to sell in the way you did & there can be various other problems to overcome. She could end up homeless earlier than she thinks!

[peteepetee]

Foolish would be one word. Housing benefit is her plan so looks like she may be in for a shock. Thank you so much for taking the time to help me, I really appriciate it.

[Uzoma]

Just to let you know also that in the unlikely event that the house is sold by auction or for less than �140,000, the owner is still liable for the shortfall.

[peteepetee]

Thanks for that Uzoma. Although if I don't get it from the house sale, I'm confident that I won't get it at all. They can't force someone to give money they haven't got. The system has let me down and her away so many times throughout this whole sorry mess that it has me in despair.