Dos And Don’ts Of Buying A Repossessed House

Buying a repossessed house is akin to playing a game of Russian roulette. A single miss, and you may end up losing your investment. But if the risk pays off, you’ve hit jackpot! The recent market slump has resulted in a large number of homeowners having their property being repossessed. They’re sold for a bargain and are the perfect investment option for first time investors. Here are a few things to remember when buying a repossessed house:

You have to make your move very quickly:

Repossessed houses are often purchased by real estate investors who buy the property for dirt cheat prices, spend a few hundred on renovations, and either rent it out or sell the place for double the purchase price. You will have to make your move before cash – for – investors buy the place. The only way to do this is to build a good relationship with real estate agents in your area. Visit them during the week (and not the weekend) to let them know about your intentions.

You may have to buy the house within a week:

Once you find a house that’s worth bargaining, don’t hesitate to close the deal. You may not have more than a week to buy, before another buyer comes up with a better offer. Even before beginning the house hunting process, speak to a mortgage adviser to know how much you can borrow and the formalities required for completing.

You have to be ready for some tough negotiation:

Not all repossessed houses are sold at a discount. Sometimes, you may end up paying a price that’s almost equivalent to a new house.

Get a pre approval letter from the bank:

A preapproval letter from the bank ensures that you don’t lose the property while waiting for the home loan approval. A preapproval speeds things up when making an offer.

Look for hidden costs in the property:

Repossessed houses are often sold as it is. In more cases than not, homeowners who couldn’t afford to pay mortgage, abandon the property. Sometimes, the previous owners strip the place of fixtures and furnishings before leaving. They’ve also remained neglected for long. If you are in doubt, hire a home inspector to identify defects and cracks in any. Look for reputation around the property.

Investigate the title deed:

Sometimes, restrictions on the Title Deed aren’t mentioned in the information provided. Go through the title deed and examine the different covenants carefully before making a sale. Examine the reputation of the place, look for schools, transportation facilities, etc.