Buying a repossessed house
There's no doubt that the current financial climate is proving to be very difficult for many people. To this end, you may want to consider buying a repossessed house in an effort to save on purchase costs.
Certainly, a number of repossessed properties are now appearing on the market – and many of them are being sold at very low prices. If you are considering buying a repossessed house, there are two main ways to look for/ buy properties – via an estate agent or at an auction.
Buying a repossessed property through an estate agent
Here, we outline the process of buying a repossessed property directly via an estate agent. In many ways, the process is exactly the same as per any house on the market – the estate agent will value the repossessed house, advertise it and they may also show prospective buyers around the house. Estate agents will generally advertise repossessed houses in their office and sometimes in local publications i.e. newspapers and/or specialist property magazines or papers.
It is worth bearing in mind however, that the lender (i.e. the company who currently have a mortgage on the property) will be looking to get the best possible price for their property. This is especially true in recent years, when more and more people are finding themselves in negative equity i.e. their homes are worth less than the mortgage on them. It is the lenders responsibility to get the best price to recoup losses wherever possible.
Because of this, you may find that you put in an offer on a repossessed house and yet the estate agent continues to show other prospective buyers around it. You may even see that your offer has been accepted in your local newspaper. This is normal; the estate agent will have been instructed by the lenders to advertise the agreed price, and invite other interest to make sure they get the best price they can.
You will need to ask the estate agent a lot of questions when you do view a repossessed property as you may need to perform some research yourself to obtain certain facts about it i.e. establish any work completed, planning permission or boundary disputes.
Buying a repossessed house from an estate agent is therefore very similar to buying any other house – the same fees will generally apply (estate agent/solicitors). However, as the full history of the property may not be known by the estate agents – you will need to factor in any additional research/solicitors costs. If you do this, you could get a real bargain.