The simple answer is because, by going for a repossessed house, you can achieve a saving of up to 30% off market value. That saving doesn’t come easy though, you need to spend time researching as well as time and money on repairing the property. If you are prepared to put in the time and effort required, however, buying a repossessed house can help you achieve a very profitable purchase.
What are Repossessed Properties?
Past and current recessions see more people than using falling behind with their mortgage repayments; jobs disappear, everyday essentials cost more and, for some, mortgage payments get left behind.
If you have steered clear from buying a repossessed house because it makes you feel guilty, well, it’s not actually that cut and dried. When the lender repossesses a home, that doesn’t mean the debt is cleared – the borrower still has to pay any shortfall when the property is sold; so by buying a repossessed property you are actually helping the previous owner.
Properties aren’t repossessed solely for failure of mortgage payments though; those half-finished estates you sometimes see also come under the heading of repossessed – the developer may have run out of money due to the recession and be in no position to finish the development. His only way out of the situation is to get the properties sold as is.
Don’t forget distressed property sales either; this term refers to properties that are up for sale at lower than market price because of something traumatic happening in the seller’s life, such as death or divorce.
With up to a third of the market value, the repossessed property market is worth watching closely.