If you are looking for a new home or an investment opportunity, you will at some point, encounter properties that have been repossessed. Far too many buyers extend themselves too far and after a year or two of struggling to pay the mortgage, the property is eventually repossessed. There are benefits to buying a repossessed property, which would typically be auctioned off, and here are some important things to bear in mind when buying a repossessed property.
The Seller
Unlike buying a home from a private seller, a repossessed property is usually owned by a bank or finance company, who foreclosed on the previous owner when they defaulted on their mortgage payments. While this means the seller doesn’t have to sell in order to facilitate another relocation, they often would like to liquidate the asset and make their money work in another sector. If you are lucky, a low offer might be accepted, although most repossessed homes are sold by auction, where the seller stipulates the minimum price. For more information, you can check out articles on repossessed properties available online.
The Risks
There are risks when buying a repossessed property, as the owners will not be able to furnish you with any information about the property. You are advised to enlist the help of a competent conveyancing solicitor that has extensive experience in handling repossessed property, as they will be able to carry out extensive searches on the property, along with building inspections to ensure that the property is structurally sound. It is true that sometimes you can find a real bargain, especially if the lender is keen to liquidate and it is only by making regular visits to the online auction websites, looking for the ideal property at an attractive price, that you can find such a bargain.
A Personal Inspection
As the property has no real history, which would normally be given by the seller, you are advised to visit the property and take a look for yourself. This doesn’t mean that you longer need the building inspection. In fact, it is critical that a repossessed property be inspected, which is something your conveyancing solicitor can handle. Normally, the seller would provide you with a lot of background information on the property – whether it had even had any major renovations or been affected by floods – and without this, you really must be meticulous when looking at such a property. In conveyancing a repossessed property, the work will be generally the same as purchasing an asset directly from the owner.
Act In Advance
Once an auction begins and bidding starts, you are making a legally binding commitment when making an offer, therefore, you should browse all of the auctioned items well in advance. If one takes your fancy, have your conveyancing solicitor arrange for building inspections and surveys. Then you can bid with confidence, knowing that the property is, in fact, a good deal. Without the right preparation, you might end up owning a derelict property that is worth much less that you paid, so it is vital you carry out all essential checks and surveys on the property before the auction date.
The actual legal side of the transaction is quite straightforward and your conveyancing solicitor would be able to ensure that the property is legally yours and hopefully, you will have purchased a real bargain.