Property Wisdom – Don’t Rule Out Repossessions

If you can act quickly and are a dab hand at doing your due diligence – repossessions are worth pursuing, says property expert Laura Henderson

 

“Opportunity often comes disguised in the form of misfortune.”

– Napoleon Hill

 

 

Buying a repossessed property has unpleasant connotations for some, yet it can help put a debt-ridden vendor back on the road to recovery, as well as proving a savvy purchase, with some homes selling for up to 40% off their market value. So how do you go about tracking one down?

Estate agents often get first crack at marketing repossessions, but don’t openly advertise their ‘status’, so you’ll need to make a direct approach and see what they have listed as “vacant property”, “no chain” or “sealed bids”. More than a ‘normal’ sale, the property needs to prove itself to you. If the vendor has been trying to sell the place for some time, there’s a good chance you’ll uncover defects, so bring along someone you trust to give the house the once over and get a survey done on older properties.

If you put in an offer on a place and it’s accepted, don’t take it personally if it remains on the market. A bank or building society has a legal obligation to secure as much as possible for the property to recoup losses and they may even advertise the house in the local newspapers as a “notice of offer” in the hope of getting a better price, which they’re legally within their rights to do. If you’re not prepared to run the risk of being gazumped, then buying a repo is probably not for you.

Top Tips:

 

• Contact local agents and auction houses and ask to be put on their mailing lists for ‘distress sales’.
• Keep an eye out in your local paper for “notice of offer” adverts – if it states ‘by order of the mortgagees in possession’, you know it’s a repossession.
• Always have “subject to contract and without prejudice” written into any bid you make – this will protect you against any hitches that might arise before exchange of contracts.

 

 

 

 

Laura Henderson is a property columnist, author and investment expert. Her latest book Tricks and Mortar: The Little Book of Property Wisdom is out now on Amazon.