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Property repossessions at auction
can provide opportunities to buy repossessed property at a purchase price below actual value. It is worth remembering that ...
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In the UK, Property Repossessions are hardly ever advertised through newspapers or high street estate agents, but do frequently come on the market through property auctions.

Although the number of property repossessions is still far below that seen in the Nineties, an increasing number of homeowners find they are unable to meet their mortgage payments and end up seeing their repossessed homes sold off at property auctions by their mortgage lender.

Banks may be reluctant to reveal that the property they are selling has been repossessed. You may be able to find clues in the information provided, such as ‘at the instructions of the liquidator’.

Although property repossessions at auctions can provide opportunities to pick up property at a purchase price below the actual value, it is worth remembering that the mortgage lender – the bank, building society or specialist financial institution – is obliged to get the best price for the repossessed property.

For you as a buyer, this can mean an increased risk of getting gazumped as offers will be invited until exchange.

The mortgage lender selling property repossessions can decide to accept an offer subject to a 7-day notice. This means that other interested parties are invited through an ad in a local paper to submit their offers by the end of the 7-day period.

If there are several offers, the lender can go back to all parties and ask them to increase their offer or come up with a best and final offer.

You can usually improve your chances by having your ‘mortgage decision in principle’ in place in order to assist the mortgage company selling the repossessed property to verify your offer.

Expect to find yourself bidding against other interested parties, even if the property is not sold in an open property auction. This may be a drawn out process and you are usually advised to resist the temptation to increase your offers by too high increments.

Although the lender selling the property repossession may ask interested parties to come up with a best and final offer, they have an obligation to obtain the highest price. You can, therefore, still go back with a higher offer right up until the point of completion.

The seller may also decide to give you a 28-day deadline for completion. It helps to have a fast, reliable solicitor in place, although local searches can take weeks and put your deal at risk.

It is worth bearing in mind, however, that repossessed properties can be severely neglected, as the previous occupants were most likely seriously short of cash.

Repossessed houses are available at approx 36% below their market value HERE!

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