Repossessed Houses For Sale
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A repossessed house is one that has undergone a foreclosure as result of a borrower being unable to consistently meet their mortgage obligations each month. Once a property has been repossessed the lender must then arrange to sell the property as soon as possible with the primary aim to cover all the outstanding debt, plus any other costs involved with this tedious process. As a result, lenders often list these properties way below market value in order to recover their debt as quickly and easily as possible. This is the primary reason that repossessed properties have become increasingly popular with property investors, enabling them to enter below market value and add asset value with ease in the short term.
If you are looking to save money and are willing to put in the extra effort, repossessions are certainly an avenue to consider. With that being said, here are a few things to keep in mind before investing in a repossessed house.
This is important whether you are buying a repossessed property or not. Buying property is an investment, and if you do not want this to become a liability, we suggest you do your research. In the case of foreclosed homes, it is more important to do such research. Check what caused the foreclosure, find out how the new price came to be, research the cost of real estate in the area. Spending time and effort now will save you time and effort later.
It is important to consider the level of care that previous tenants took within the property before they were evicted. It is often common for repossessed properties to be somewhat neglected as tenants unfortunately fall into financial troubles. Such things to look out for include damaged fixtures and fitting being removed or damaged.
Always remember that the government or any lender may not fix up the house after foreclosure. The house you’re getting might either be in perfect condition or slightly run-down.
Do a thorough inspection, calculate estimated repair costs and include them in the price of the house to understand how good of a deal you will be getting. We recommend visiting a potential investment property several times, crucially with a solicitor or surveyor. As these properties have no onward chain, there is no previous tenant to pass on any helpful tips about any minor defaults in the property, this will be down to you. However, run-down nature of repossessions is why many choose to invest in them as they provide incredible potential to add value in the short term.
There are two ways to go about getting a repossessed house. You can either bid at repossessed auctions (also called foreclosure auctions) or you can buy it through a real estate agent after the house becomes the property of the bank and is listed for selling.
Traditional property sourcing agencies charge in excess of £5000 to secure just one investment property. However, at repossessedhousesforsale.com we provide our clients with access to thousands of below market value repossessed property investment opportunities from across the United Kingdom for just £9.99 per month. Subscribe today and start your next repossessed property investment search with our 48-hour FREE TRIAL.
Repossessed houses sometimes go into foreclosure auctions where potential buyers and real estate agents bid to get the best deals. This might seem like an interesting thought at first, but always remember that when you bid at such auctions you are not getting to see the interiors of the property in person. This can sometimes work in favour and you’ll hit the jackpot, but sometimes things can go the other way. Always keep this in mind when bidding at such auctions.
Get a survey! Professional investors might take a chance and not bother, but as auction homes are more likely to have defects, it’s crucial. Of course, the risk is you’ll fork out for a survey and not be the winning bidder. But if you skimp on it, you could risk much more.
Compared to auctions, this might be a safer bet since you get to see the house properly before making a decision, and also because there comes a certain level of trust and security that comes with dealing with a bank-owned property.
When a bank or building society claims back a house, it has a responsibility to get as much as it can for the property to minimise any losses. Yet while most sellers spend months beautifying their boltholes and waiting for the right offer, banks often just price them cheaply to sell quickly.
When it comes to picking a house, emotions need to take a back seat. Yes, you need to like the house before you buy it, but you also need to understand any liabilities that might come with buying repossessed houses. Sometimes emotions tend to blur important details out which will come to bite you later when it’s too late.
The downside is these properties often need a refurb. At best, they might feel a bit unlived-in. At worst, the previous owner could have stripped out all fixtures and fittings before leaving.
Repossessed homes can come with a significant amount of property development. Whether it’s the structure, plumbing, interiors or exteriors it always helps to have some cash saved up for such expenses.
As long as these factors are considered into your budget, repossessed properties give you the ability to tailor the property exactly to your needs and the tenants that you may want to let to. This freedom is hard to find within other property investment avenues.
Since such homes come with really discounted prices, always be quick to get to the deal. This should not compromise on the other points mentioned above but being quick will help get the best deals.
Under normal circumstances when buying a property, timescales can be very relaxed. However, when buying a repossessed property from the bank, time is very much of the essence. Act fast, with confidence and with a sound understanding of your investment strategy.
Repossessedhousesforsale.com have a wealth of experience sourcing repossessed investment opportunities across the UK and can assist in your property search. Subscribe today to have access to thousands of exclusive repossessed properties all within one cost effective and user-friendly investor platform. If you have any questions whatsoever please get in contact with our 24/7 customer service team: [email protected].
