Buying Repossessed Houses in the UK

By November 15, 2008House Repossession

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buy repossessed housesBuying a repossessed house can be a great way to get on the property ladder, or grab an otherwise unaffordable bargain. Before buying a repossessed house, there are things to think about.

What happens when you buy a repossessed property?

When selling a repossessed house, the lender publishes an official ‘Notice of Offer’ in the local newspapers. This acts as formal notification that the lender has received an offer. And it gives them the opportunity to get a higher price if an interested party reads the notice then makes a counter offer. Luckily the opportunity to counter offer is restricted to a specific date, not open ended. But if someone makes a higher offer you’ll probably lose the house unless you can beat it.

Extra costs to factor in

If your offer to buy a repossessed home is successful, bear in mind that you might have to pay for essential services like water, gas, telephone, internet and electricity to be reconnected. And because you’ll probably also be asked to pay for repairs when buying a repossessed house, you’d be wise to arrange a full survey before you take the final plunge.

Creditors and bailiffs

When buying a repossessed house you might find that creditors come to you looking for the previous owner, via calls or letters from bailiffs. The best thing to do is reply promptly and let them know that you’re not the person they’re after. Worse still, you may have problems getting credit because the previous owner’s details have been lodged with a credit reference agency. If you’re buying a repossessed house it is a good idea to check as soon as you’ve made the purchase, and ask the credit reference agency to correct their records before things get complicated.

•    Equifax.co.uk 0870 010 0583
•    Callcredit.co.uk 0870 060 1414
•    Experian.co.uk 0870 241 6212

Agencies generally charge a small a fee of £2 to send you a copy of the data and you should get it, including details about how to change the information, within seven working days.

The Citizens’ Advice Bureau will also give good advice and guidance to those buying a repossessed house, as will the solicitor who is dealing with the sale. Either way, it’s wise to take all the advice you can find to help you avoid potentially expensive pitfalls.

Repossessed houses: amazing bargains or a risky strategy?

Repossessed houses are homes being sold by the bank or building society which has repossessed them, to whom they legally belong.

Buy repossessed property and make big savings

It isn’t surprising that the recent sharp increase in repossessed homes has resulted in more and more people taking advantage of the situation. Because repossessed properties often sell for less than if they were sold under normal circumstances, there’s the potential for big savings. Aspiring first time buyers are benefiting from a unique opportunity to get hold of a really good deal. People who have been, so far, unable to get on the property ladder are suddenly able to find affordable housing, if they can get a mortgage.

You can expect to save between 25% to 40% off of the real market value, although normally you would receive a 25% discount. We can help you to find a below market value property.

How to find repossessed houses for sale?

If you’re buying a repossessed house, you might find yourself having to search hard for suitable properties. Not because they’re rare, but because many estate agents prefer to keep repossessed houses’ status quiet. To most people repossession is bad news. And as far as estate agents’ reputation is concerned, the concept of repossession is far from positive! Some tips on buying a repossessed house:

1.    One way to find repossessed property is to enquire with your local mortgage lenders; usually banks and building societies. While they don’t usually advertise repossessed houses up front, they need to sell these properties to recoup their money and they’re usually more than happy to get enquiries.
2.    Another way… check your local papers, where mortgage lenders announce offers they’ve had on repossessions in the hope of getting higher offers.
3.    It also helps to keep an eye on your local property auctioneer.

Get more advice at moneysavingexpert.com

A few things to bear in mind when buying a repossession:

•    Repossessed houses aren’t always in perfect condition, especially if the previous owner didn’t have the money to keep up maintenance. You might find damp, leaks, faulty drains or broken heating systems.

•    You might find you need to do a lot of cleaning, especially when the property has been empty for some time.

•    Sometimes, a home is repossessed because the original owner simply hasn’t been able to sell quickly enough to avoid repossession. There might be a good reason for this; terrible traffic congestion, a noisy pub in the same street, no local train service or one right outside your back door… it’s wise to check carefully.

A great place to start looking for repossessed houses is at auction and Allsop are one of the largest in the UK.

Join the discussion 27 Comments

  • mike Johnston says:

    Hello,
    Can you please give me some advice, as to what I should check for. when buying a repossesed house.
    My credit I am very sure is okay as have never missed a mortgage payment and have no other debt. I do have a mortgage offer.
    The house I am looking to buy has been repossesed by a bank. and I am looking to purchase the property. How likley is it that some loan company may knock on my door an say “we are taking the house off you, to pay for the last owners loan, secured on the property”?
    How can I check this out before signing.
    I am willing to pay the small fee’s involved, for peace of mind.
    A speedy responce would be most greatful, as I don’t have much time till closing date.

    Regards Mike

  • Christina says:

    Hello Mike,
    The cash you pay for the repossesssed property goes to the bank which gets passd onto the loan company. The remainder of the balance has to be paid by the previous owner – the person who had the house taken off them.

  • Enie says:

    I would be very grateful for some advise the ff: If we buy a repossessed property at auction, would we own all the contents of the property, including the garage contents? If there is a car in the garage for example, would we own that too? What if there is outstanding finance on the said car? If there is no outstanding finance on the car, would the car be considered as ours? Would we simply re-register the car in our name, for example? A quick response will be appreciated.

  • Hayley says:

    I have found a repossession that I want to buy – Problem – There is no kitchen sink ect or bathroom suite – the plumbing and pipes are there but these 2 rooms have been stripped bare (there is an outside toilet).You would think – Not a problem as a new kitchen and bathroom suite is relativeley inexpensive.
    PROBLEM – the mortgage lender will not lend unless the property has a fitted kitchen or bathroom??
    DOES ANYONE KNOW OF ANY MORTGAGE COMPANIES WHO WOULD LEND US THE MONEY? (I’ve tried Natwest & Halifax). HELP PLEASE 🙂

  • emma says:

    I am looking to buy a repossessed house at an aution and would like the house to be in cheshire. Does anyone know off any autions in the area and the dates they are on?

  • Peter Simons says:

    Hi Emma,

    Here are some of the upcoming house auctions in the UK:

    http://www.repossessedhousesforsale.co.uk/forthcoming_auctions.asp

    If you want iformation on all UK auctions, you need to subscribe, prices start at £1 a week:

    http://www.repossessedhousesforsale.co.uk/sub_pay.htm

    Repossessed homes are normally sold at auction, because of the state of the economy it is likely than many homes at the auctions will be repossessed.

  • PeterM says:

    A word of caution –

    I’ve found that reposessed houses are often put on the market for significantly below what they expect to achieve.

    Also, as noted above, there is a very high chance of being gazumped. I have twice had my offer accepted before the vendor has pulled out in favour of a higher bid. And they don’t care how far on you are with the sale!

  • Sarah A says:

    Hiya, can you please tell me if theres any way knowing how you find out how much the actual price a repossession house owes to the bank before the market price please?

  • Andre says:

    If anyone is interested I have found a great site for buying repossessed properties: propertyearth.net. They seem to be sourced directly from the bank and the site is free to use (no ridiculous finder’s fee). The site is quite new but the number of availble properties is growing every week. Worth a look.

  • Michael Simpson says:

    I just found a terrific discussion on repossessed houses for sale:

    http://forums.moneysavingexpert.com/showthread.html?t=396185

  • TINA says:

    hi i have put an offer in for a property for the asking price and it as been declined, however they have accepted a lower offer from the first people whom viewed, are the repossion company allowed to do this.

  • Neil says:

    Tina,

    The repo company are duty bound to obtain the best possible price for the property – so i would say that they are not honouring this duty…. bear in mind that the person who has been repossesed could potentially sue the repo company if they did not get the highest possible price, as it would leave them having to pay back more debt than would have been expected if they took your offer.

  • Eddie says:

    I have just viewed a property that has been repossessed. When we went inside the previous owner has left numerous items behind, furniture, rcords and musical instruments, he has also left his car behind on the drive, it doesn’t appear to have been used.

    The repossession company have told me that they have no intention of moving it and it will be up to the purchaser to get rid of it. I am a bit concerned about the legality of any prospective purchaser getting rid of these items. Where would we stand if the owner came back to claim the property and his car?

  • Ceire says:

    I am looking to sell my house, and might end up buying a repo, how long do i have to complete/buy the house, incase my other house doesnt sell in time. I hope this makes sense.

    Ceire

  • Simon says:

    If you looking to purchase an investment property, fill in this form:

    http://houserepossession.co.uk/auction-properties-list

    I am looking for a below market value property (BMV) investment.

    I got a call 1 day after filling in the form and the property investment specialist was able to show me some terrific BMV properties.

    It looks like I will be purchasing 1 of these properties and the search for a great property investment is over.

  • sarah says:

    I have just bought a reposession and the bank has said they have no intention on moving any of the previous owners stuff. Do i own everything in that house and can get rid as i am a bit dubious about where i stand? The estate agents said i can get rid but i’m still unsure.

  • Amy Judson says:

    I’ve just had an awful time trying to buy a repossession. I’ve now had to pull out as the parties involved were so difficult to deal with and were unable to provide simple information about this 3 yr old property. Beware – the legal aspect of buying a repo can be complex and expensive.

  • Zoe says:

    Hi guys

    A little help is needed I feel so I hope you have the time to put hand to board??

    I have found a repo and offered the full asking price which has not been accepted? But was told by the estate agent to complete searches and valuation which we have now payed for. It was only tonight that I was told that the full advert and price for the house will be in tommorrows paper. I understand that they have to be seen to get the best price for the property but why am I being told to put things in place when my offer has not even been offered to the bank?

  • Jonathan says:

    I have bought a repossessed property on auction. I really did save thousands in the process.

    I would recommend anyone who wants to go this rout to do so.

  • Abby says:

    Hi

    Myself & my husband are looking to buy a repo property that is currently on the market.

    Do you know whether its likely to go over the asking price?
    We are willing to pay the asking price but if we offer this are others likely to out bid us above the price?

    Have any others had experience of this?

    Thanks

  • Abby says:

    I have been told on another property we looked at that it was sold as seen. So all the rubbish in the house & garden belonged to us.

    This means you have to pay to get rid of this. Also if it was in massive piles like we saw then be cautious. You don’t know who the last owners were, or what they owned. It could contain asbestos which will have to be disposed off properly.

  • Amit says:

    Oh I do love it when something I’ve wrttien has been helpful thank you Sarah. This other person will have their own reasons for behaving their way, and those reasons are not for us to question. I’ve added to my blog schedule a post about being unaware of the negative impact our behaviour might have on others. Stay happy x

  • Thabiso says:

    You’re mixing up the elnetmes of the crime with the remedies. In either hypothetical, the property remains the property of the owner from whom it was stolen. When the owner sues, they will receive a judgment for money damages for the value of the property stolen, and the ownership of the property will pass to its present possessor. Good luck enforcing the judgment against Wolverine, though although if I recall, he does own some real property in Madripoor, and given his long lifespan, he may hold title to some other land (or other hidden assets) which he doesn’t even remember.Also, there’s a chance that the clock starts ticking on an adverse possession claim (though adverse possession is usually only used for realty, it’s possible that it may extend to personalty, as well, depending on the wording of the statutes that apply.)

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