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Buying a repossession property

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Repossessions

Hi I’ve been looking for a while at buying a house at auction and been examining where why the properties are been sold.

This last week I’ve noticed a vast increase in the number of properties been sold by fixed receivers / by repossession.

Can any one think of the pro’s and con’s of buying a repossession property, apart from the obvious cost reduction if any… Quite a few seem to have people in them and on the auction paper works says tenants occupying or tenants unknown….

Is is a good time to buy now or should I wait a while until more repossession start coming onto the market…

Any views would be appreciated? Thanks

Comments

  • Debt_Free_Chick
    Debt_Free_Chick Posts: 13,276 Forumite
    10,000 Posts Combo Breaker
    rrwfotr wrote:
    Can any one think of the pro’s and con’s of buying a repossession property, apart from the obvious cost reduction if any…

    Confused ... what is the obvious cost reduction? :confused:
    Warning ..... I'm a peri-menopausal axe-wielding maniac ;)
  • Doozergirl
    Doozergirl Posts: 34,075 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Some of the downsides to buying a repossession are that the mortgagees often don't have any real details about the property that you are buying so your solicitor will have to work a bit harder for their money. It does complicate things when there are time restraints and immediate exchange of contracts is required.

    If you buy a repossession at auction, you at least know that you're not going to be gazumped because you exchagne immediately - really, the lender is obliged to invite people to do this on the open market.

    You often have to pay towards the other parties costs etc and there may be some confusion, which has to be resolved before exchange, over who pays any debt due to management companies etc (with leasehold properties). If someone hasn't been paying their mortgage, they often haven't been paying service charge and possibly their bills too which means a relatively minor inconvenience of key operated meters, paying to have services reconnected and the meters changed over after a certain period of time.

    Buy a house with the right discount and you already have a buffer against price falls.
    Everything that is supposed to be in heaven is already here on earth.
  • rrwfotr
    rrwfotr Posts: 573 Forumite
    Confused ... what is the obvious cost reduction? :confused:


    hmm does this warrant a comment?? Obviously you would buy /offer below market rate due to only offering what you want to pay if the offer goes above your reserve then you don't bother....
  • Debt_Free_Chick
    Debt_Free_Chick Posts: 13,276 Forumite
    10,000 Posts Combo Breaker
    rrwfotr wrote:
    hmm does this warrant a comment?? Obviously you would buy /offer below market rate due to only offering what you want to pay if the offer goes above your reserve then you don't bother....

    But this wasn't "Obvious" from your initial post - you didn't mention that you'd had a valuation to establish the "market rate". As property doesn't come with an RRP, you can only rely on an independent valuation of the property's worth.

    If, at auction, you can get if for less ... then fair enough.

    But you also seem to be implying that repossessions "always" go for less than their market value and this is simply not the case. For a number of reasons, a buyer might be prepared to pay more. It depends on the property and those who attend the auction on the day.

    Regards
    Warning ..... I'm a peri-menopausal axe-wielding maniac ;)
  • Astaroth
    Astaroth Posts: 5,444 Forumite
    Repossessed properties from my limited experience tend not to be in as good a shape... either just from general wear and tear not properly maintained or in a smaller number of cases malicious damaged caused by the now evicted owners
    All posts made are simply my own opinions and are neither professional advice nor the opinions of my employers
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