What happens when you buy a repossessed property?
When selling a repossessed house, the lender publishes an official ‘Notice of Offer’ in the local newspapers. This acts as formal notification that the lender has received an offer. And it gives them the opportunity to get a higher price if an interested party reads the notice then makes a counter offer. Luckily the opportunity to counter offer is restricted to a specific date, not open ended. But if someone makes a higher offer you’ll probably lose the house unless you can beat it.
Extra costs to factor in
If your offer to buy a repossessed home is successful, bear in mind that you might have to pay for essential services like water, gas, telephone, internet and electricity to be reconnected. And because you’ll probably also be asked to pay for repairs when buying a repossessed house, you’d be wise to arrange a full survey before you take the final plunge.
Creditors and bailiffs
When buying a repossessed house you might find that creditors come to you looking for the previous owner, via calls or letters from bailiffs. The best thing to do is reply promptly and let them know that you’re not the person they’re after. Worse still, you may have problems getting credit because the previous owner’s details have been lodged with a credit reference agency. If you’re buying a repossessed house it is a good idea to check as soon as you’ve made the purchase, and ask the credit reference agency to correct their records before things get complicated.
• Equifax.co.uk 0870 010 0583
• Callcredit.co.uk 0870 060 1414
• Experian.co.uk 0870 241 6212
Agencies generally charge a small a fee of £2 to send you a copy of the data and you should get it, including details about how to change the information, within seven working days.
The Citizens’ Advice Bureau will also give good advice and guidance to those buying a repossessed house, as will the solicitor who is dealing with the sale. Either way, it’s wise to take all the advice you can find to help you avoid potentially expensive pitfalls.
Repossessed houses: amazing bargains or a risky strategy?
Repossessed houses are homes being sold by the bank or building society which has repossessed them, to whom they legally belong.
Buy repossessed property and make big savings
It isn’t surprising that the recent sharp increase in repossessed homes has resulted in more and more people taking advantage of the situation. Because repossessed properties often sell for less than if they were sold under normal circumstances, there’s the potential for big savings. Aspiring first time buyers are benefiting from a unique opportunity to get hold of a really good deal. People who have been, so far, unable to get on the property ladder are suddenly able to find affordable housing, if they can get a mortgage.
A few things to bear in mind when buying a repossession:
• Repossessed houses aren’t always in perfect condition, especially if the previous owner didn’t have the money to keep up maintenance. You might find damp, leaks, faulty drains or broken heating systems.
• You might find you need to do a lot of cleaning, especially when the property has been empty for some time.
• Sometimes, a home is repossessed because the original owner simply hasn’t been able to sell quickly enough to avoid repossession. There might be a good reason for this; terrible traffic congestion, a noisy pub in the same street, no local train service or one right outside your back door… it’s wise to check carefully.
Answered on Aug 15 2011,