What is a repossessed property?

When a homeowner is unable to make their mortgage payments, the mortgage lender has the right to repossess the property. The repossessed property will often be sold at auction because the lender will be hoping for a quick sale to recover the money that they have lost from the non-payment of mortgage.

The process of buying a repossessed property is very similar to the normal purchase process.

Where can I find repossessed properties to buy?

Most repossessed properties for sale are sold at property auctions or via specialist repossession property dealers. Occasionally repossessed properties are sold via estate agents in the area that the repossessed property is located. The lender may choose a local estate agent in the hope that it will improve that chances of sale.

Advantages and disadvantages of buying a repossessed property?

Advantages

• Lenders often sell repossessed properties at a considerable discount, often up to 30% of the original value of the property. This might be an opportunity for someone struggling to enter the property ladder to buy their first home.
• The process is speedy, so you could be in your new home very quickly.

Disadvantages

• If you purchase through a property auction, you will be expected to pay a 10% deposit immediately and the remaining balance within a month.
• The process is much quicker than buying a house through normal means. The lender is always obliged to accept the highest offer. You must proceed quickly to exchange of contracts to avoid a higher offer being made and accepted.
• Be prepared to expect missing appliances or fixtures such as gas or electrical fittings as the previous owner may be responsible for removing these. Unexpected costs need to be budgeted for to ring the property back to a habitable standard.
• Utilities may have been disconnected. The utility providers may charge fees for the services to be reconnected.
• Bailiffs may not be aware of the repossession and attend at the property with a view to evicting the occupier. You will need to prove you are the new owner and that the property was repossessed.

How can we help?

We will explain the legal process and documentation, ensuring that you fully understand the repossession process. By working with us, you can have peace of mind that your legal requirements are met, and your rights are protected.