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The Great Hunt: Have you bought a repossession property?

Have you bought a repossession property?

If you're buying a home, you can find some bargains if you buy a place that's been repossessed - if you've done it, we want to tap your knowledge for tips. Any suggestions for new buyers? What tactics did you use? And if things aren't working out, when is it time to walk away?

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  • tgroom57
    tgroom57 Posts: 1,431
    First Anniversary Name Dropper First Post
    The house I bought had been repossessed. Pity the estate agent didn't tell me upfront about that detail, they were in too much hurry to get the maximum price for it still. It certainly wasn't a 'bargain'.

    Thing is, the house wasn't the only thing the previous owners defaulted on. I had bailiffs coming round for 3 years after I moved in. The first gave me the shock of my life by listing all my newly bought goods and saying he'd be round to collect them later.
    So- if you buy a repossessed property, don't open the door to anyone until you know who it is.
  • G_M
    G_M Posts: 51,977
    Name Dropper First Anniversary Combo Breaker First Post
    I went for a repo that looked like a bargain.

    Ended up in a bidding war with one other buyer and the price just kept going up. In the end I dropped out.

    The good news was the solicitors had been really keen to get my business and guaranteed to get to Exchange fast (to secure the purchase). They were so confidant they offered me a no-sale-no-fee deal, so at least I was not out of pocket.
  • Sue_J
    Sue_J Posts: 3 Newbie
    I bought a repossessed flat as a buy to let a few years ago. It looked as if it was in a bad way (hot water tank stolen, writing on the wall, doors off kitchen units, etc.) but most of the problem was relatively superficial.

    It turned out to be a good buy, and didn't cause us any bailiff problems. These are the things that I think helped me:

    1. Put in a ludicrously low offer. There was no-one else interested in it, and the mortgage company immediately came back and said ''£x is the lowest we are allowed to accept". It was worked out on the value of the debt, and I think they only told me as the estate agent had said I was 'buying a flat' rather than 'wanting that particular flat', so they knew they had to hook me with no-one else in sight. Make friends with the estate agent to find out as much info as poss, without giving away anything that would raise the price.

    2. Be prepared to move quickly once your offer is in. The vendor will have to post a legal notice for a set number of days (can't remember how many) that it's received an offer of £x for the property, usually on the estate agent's website. That tells everyone what you've offered and may tempt someone else into joining in. So you want to exchange as soon as possible after that period.

    3. Ignore the rules that say that you can't open someone else's post. Open every debt letter that arrives, phone the company that the debt's with (originator or debt collector) and tell them the position, following up by email or letter. Keep all the letters you receive, with a note on them of when you called, who you spoke to and how you followed up. If you get a second letter about the same debt, go into overdrive with the follow up.

    4. If you're not living there (or maybe even if you are), put a notice on the door saying that the property has been repossessed and sold, providing details of the mortgage company you bought it from and a (mobile phone) contact number for you. No idea how useful this actually was, but the new tenant had no problem with bailiffs, so it may have helped.
  • e_clark
    e_clark Posts: 14 Forumite
    Our house was a repossession, so we learned a few things along the way!

    1. The electric and water will often be disconnected, so you won't be able to check them pre purchase, and if successful you will have to get a professional in to turn them back on (watch out for holes in pipes etc that disgruntled ex- owners have done).

    2. The estate agent will do some scare mongering once you've put on offer in to try get you to increase it - e.g. Someone else interested is putting in a higher offer etc - at first we panicked and raised our offer too due to our investment in fees and surveys etc, however all offers have to be publicly published for 7 days before exchange/completion etc, so just tell them you will wait for the other offer to be published before you consider adjusting yours! Often we would get a call the next day saying the magical higher offer had been withdrawn.

    3. You can lose money - you have to put money into surveys and solicitors fees before you know it's definitely yours as someone can snipe you at any time before exchange - in fact we were sniped something like an hour before the deadline but because we had already signed our solicitor sorted it for us luckily.

    4. You won't know about any problems with the house or area as the owners aren't there to ask, and the estate agent will know virtually nothing.

    5. You'll get a lot of mail for the previous residents.

    6. In all likelihood the letterbox will have been screwed shut to protect the house so once it's yours it's worth ringing the local Royal Mail delivery office to let them know that you've moved in now and it's reopen. Ours even filter some of the old residents mail out for us.

    7. Check everywhere fully - the previous owners were probably not very happy about leaving and so potentially could have done anything to the house - fish behind radiators, holes in water pipes, cut cables-aerials, so have a good check.

    8. You might get the police round like we did! They noticed activity in the house again and had been looking for the previous owner - quick word with us and they were on their way, but you never know what the previous owner might have done!

    9. As with any new house purchase, change the locks. The bank will probably have done it too but it's worth doing to make sure.

    10. Be prepared for everything to go quickly - the bank usually has a deadline of 28 days from offer to exchange, so you need to have sorted everything you need for mortgage and keep on top of that, making sure the lender know it's a repossession with a tight deadline. I wasn't working at the time luckily as I don't know how we would have done it, I spent a significant amount of time every day chasing people!

    Finally, enjoy your property which you probably got for much lower than market value!
  • peak1
    peak1 Posts: 13 Forumite
    We have also recently bought a repossession.

    In addition to what has previous been said I would suggest the following:

    1. When you start getting junk mail for the previous occupants, sign them up to the Mail Preference Service. There is an option to say that they are previous occupants and so you can slowly reduce the spam.

    2. Even if the electricity and gas are turned off, if you know a reliable tradesperson, they can do a visual check for you before exhange to identify any potential problems. They will not spot everything but should be able to give you an indication of where the problems might be. For example our plumber said that the boiler looked like it had been maintained under a British Gas contract as there were some parts that had been replaced recently (that only BG use) and therefore it should be in good health. He was right as we had a letter waiting for us from BG asking if we wanted to continue the contract that the previous owner had had.

    3. We had no keys for the double glazing when we moved in (not helpful with 3 young children). Luckily the windows were supplied by Anglian and we were able to transfer the remainder of the warranty for £50 and then order 15 new keys free of charge. :)

    4. We have returned all letters to the sender. This has greatly reduced the number we have received. HMRC and Companies House will not discuss accounts for other people on the phone and so the best way to inform them is to return the letter unopened. I tried calling and was told to return the letters. After 2 failures they then take a closer look at the company/person.

    5. We managed to negotiate access to the house between exchange and completion. This allowed us to decorate the childrens bedrooms, rip out a dangerous office installation in the garage (highlighted by surveyor and electrician) and also replace and repair some of the floor downstairs. This made moving in a lot simpler.
  • Some very useful information here. Thanks guys.

    Just a quick one, how do you know which properties are repossessed without speaking with the Estate Agent or in case they don't tell you?
  • katejo
    katejo Posts: 3,743
    Name Dropper First Anniversary First Post
    shahzeb wrote: »
    Some very useful information here. Thanks guys.

    Just a quick one, how do you know which properties are repossessed without speaking with the Estate Agent or in case they don't tell you?

    I see ads in the local paper with the heading 'Public Notice'. They usually say that an offer has been received and ask for any higher offer by a specific date. I think these must be repossessions but have not personally been involved in making offers for them.
  • My daughter and her boyfriend bought a repossession property. Having put their offer in they had a few nail-biting weeks, whilst the public notice went out, but 'got' the house for approx. 90% of its real value. No problem with the mortgage company, but they DID have to pay for the refurbishments (central heating, electrics, new kitchen) out of savings rather than adding it to the mortgage. Had to replace all of the locks (especially after the previous owner tried to break in, trying to get his (non-existent property) back). The sale price of the house has not been published by the Land Registry - apparently this is because the price wasn't typical of neighbouring houses - guess this means they got a bargain! Would suggest you get your mortgage company 'on-side' before considering this - NatWest were brilliant (and still are - agreed to an addition to the mortgage less than a year later, as they saw the value of the house increasing due to improvements made). Personally I wouldn't have even thought about taking this route but guess youth is on their side! Also, consider that you may have to pay for the water/electric/gas/telephone to be re-connected, due to the previous bad credit history of an owner.....
  • shahzeb wrote: »
    Some very useful information here. Thanks guys.

    Just a quick one, how do you know which properties are repossessed without speaking with the Estate Agent or in case they don't tell you?

    Tape on the taps!

    Estate agents descriptions don't always mention it. The best way I have found is to check the internal pictures of the property on the website. Usually if the property has been repossessed the bank have had someone in to secure the property which means all the taps will have "do not use" tape liberally applied to them.
  • I found a few weeks later after it rained, most of the outside drains were filled with gravel and needed unblocking.
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