Reasons to choose Wilson Browne
In a buoyant market, repossession properties are less likely to appear, but when they do a potential purchaser may think that they can secure a bargain.
However, buying a repossessed property might not be as appealing as it first seems and there are a number of pitfalls and potential dangers to be aware of.
Repossessed properties are properties being sold by mortgage lenders when the owner of the property cannot meet their mortgage repayments. They are often seen as a way to purchase a property for slightly less than market value, as the mortgage lenders main purpose is to recover the monies owed under the loan as quickly as possible.
As the mortgage lender will have no detailed knowledge of the property they cannot provide the information that a normal seller would be able to, for example, any informal rights, whether works have been carried out at the property or any problems with neighbouring properties in the area. It is therefore vital that a potential buyer carries out a survey on the property, informs their solicitors to order searches on the property and also talk to neighbours to find out as much information as they can about the property and the local area.
A buyer should inspect the property before purchasing, as it is likely that the property will not be in a good state of repair. They buyer should also check that the property has been cleared of the previous owner’s possessions as they will not be entitled to them as a purchaser.
The property may be ‘blacklisted’ especially if the repossessed owner hasn’t changed their details with their creditors. Chasing letters for bills may be frequent, as well as bailiffs turning up at your door.
The most important thing when buying a repossessed property is the ability to act quickly. Most lenders selling a repossessed property will give a potential buyer 28 from receipt of the contracts to exchange contracts. However, during that time, the property will remain on the market and there is always a risk that another purchaser may gazump you. Lenders have a duty to obtain the best price possible and will not take into consideration the fact that you are able to proceed quicker than any new purchaser. You need to be prepared that at the end of the day you may lose out.