Posts Tagged ‘Buy A Repossessed Home’

BBC – UK Home Repossessions Up 50% In One Year

Friday, May 15th, 2009

A new article today on the BBC website shows shocking new figures illustrating the large number of repossessed homes in the UK.

The number of homes repossessed in the UK rose to 12,800 in the first three months of the year, the Council of Mortgage Lenders (CML) has said.

This was up 23% from the 10,400 in the previous three months and 50% up on the 8,500 in the same period last year.

The CML has predicted that 75,000 homes will be repossessed in 2009, almost double the 40,000 of last year.

Read the full article on the BBC News Page

Buying A Repossessed Home At Auction Q&A

Thursday, May 14th, 2009

Below are some common questions for property auctions:

Why Should I Buy At Property Auction?
There are numerous reasons for buying at property repossession auctions. All sellers at auction are motivated to sell and want to sell quickly. This often means that they are willing to sell their property at a low price. Often the residential properties will renovation work carrying out which means there is an opportunity for the buyer to make some money and also increase the value of their property. Also once the hammer falls at a property auction there is no chance of going back on a deal so there is a certainty of purchase.

Are there fewer costs in buying through auction or buying through an agent?
In both cases the fees tend to be similar, there will be legal fees and surveyors fees to payas well as any fees to pay in order to arrange finance. When buying at auction you will need to pay an administration fee to the auctioneers which typically falls between £175 and £300 plus VAT.

What type of houses are sold at auction?
The type of properties sold at auction are repossessed properties which have been repossessed by the bank or mortgage company. As a result the properties may be unmodernised or in need of work. These properties are often different to houses sold at normal estate agents as they may not be immediately ready to move into.

What are the risks of buying at auction?
The risks of buying at auction are similar to those of buying through estate agents. It is important to make sure that u have done all of your preparatory work on the repossessed property such as legal searches, checking the title and surveying the property to make sure there are no defects. The important thing to remember is that once the auction is over the deal must be followed through and you are not able to go back to the seller afterwards should any problem arise. There are no guarantees on the purchase and you must buy it as it is.

How do I find a bargain at auction?
The key to finding a bargain repossessed home at auction is to have the maximum number of options available to you. You should search auction sites on the internet and contact auction houses directly. Bargains are often properties which are not so popular, so looking for a property with defects or one which needs work can be a great option. However, its important to have the know how or ability to deal with defects so that it turns out to be a bargain and not an expensive bargain! When buying at auction, many buyers often leave with ownership of their property at a price much lower than what they were prepared to pay and in case this automatically becomes a bargain.

How can I identify repossessed homes at auction?
There are several things to look out for when identifying a repossessed home at an auction. Check the auctioneers catalogue. In some cases it will say “by order of the mortgagees”, in other cases it may actually say who is selling the repossession property for example a bank, so the catalogue will say “by order of HSBC”. In other times it will say “by order of the receiver”. These are all ways of picking up a property repossession home at auction. However, not all properties will have this information in the catalogue. If you suspect the property is a repossessed home, the easiest thing to do is phone up the seller’s solicitor and ask them who is the seller.

Repossessed Homes FAQs 2

Thursday, May 14th, 2009

What is an N244 Form?
Once you have taken proper legal advice, N244 form is probably the most important document you can have. The form allows you access to appear before the judge again and for a typical cost of £35 . It allows you to have an emergency hearing at any given point, even if you have anb eviction notice the following week for example. It means that you will be bale to appear before the judge to get an eviction turned down.

What Can I Do To Stop My Home Being Repossessed?
The first thing you should do is take advice. We have provided some information of where to get good advice on homes repossession. The judge has no mandate whatsoever to repossess your property and always looks after your best interests. Even if you appear without a solicitor the judge will typically try and help you as he does not want your home to be repossessed. A person whose house is repossessed can then become a burden on the state so the judge will try and avoid this and be on your side. However he is legally bound to use the legal system to seek possession of your property.

Can I Contest a Repossession Order or Eviction Order?
Yes you can contest a repossession order or eviction order. Again you will need a N244 form to get an emergency hearing before the judge. It is important to note that the judge will require some evidence as to why you are contesting. Eg. Remortgage evidence or evidence of sale of the property.

Are there companies that will buy my house and then rent it back to me to avoid repossession?
Yes there are a number of companies on the market who will buy your property and then rent it back to you. each will have different conditions but it must be noted that they are mercenary companies and typically will not pay more than between 65% and 80% of the value of your property. We would usually advise selling on the open market instead, but depending on how fast you need to act and if you want to stay in the property renting your house back from one of these companies can be an option.

How quickly can a repossession be stopped?
A property repossession can be stopped merely by paying all the arrears on the account in full. This will stop an eviction process immediately even if you are at the court stage.

Can I sell my home to avoid it being repossessed?
A home can be sold at any point to any interested parties, even after it has been repossessed provided it hasn’t already been resold.

Why Auctions Are A Good Place To Buy Repossessed Homes

Wednesday, May 13th, 2009

In the UK, auctions are an excellent place to buy repossessed homes. As soon as the hammer falls the purchase becomes legally binding and an immediate payment of 10% will be required to be paid to the seller’s solicitors. Mortgage companies want to recover losses after home repossession so auctions become an excellent way to sell a property quickly and recover their losses.

For a buyer of a repossessed home, a property auction can be one of the best ways of purchasing a repossession property at a price way below market value. It must also be made clear that the buyer cannot renegotiate a price after the auction is over. Often inexperienced buyers commit to paying over the odds and only find out after a valuation or worse still, a poor survey illustrates some serious problems with the property.

All auction experts advise carrying out full research into a property. They also advise having a maximum bid in your mind on repossession properties and this bid should not be exceeded. A property auction can also be a smooth way of making a purchase, a typical property auction will have 6 or 7 weeks of marketing prior to the event and completion within 4 weeks after the auction. This reduces the chances of delays due to issues of finance, answers to complicated legal enquiries or any other slowdowns. Delays are often common in normal property deals but here properties can be sold and bought in a short space of time.

Repossession auctions can often be extremely competitive and prices often rise over the guide price, so its important not to get carried away in bidding. Experienced auctioneers advise looking out for quieter auctions, if no bids are made on a property it is possible to approach the auctioneers at the end and make a low bid which can be accepted.

How Not To Bid At Auction

Wednesday, May 13th, 2009

The video below should be watched carefully. This is a common mistake many people make when trying to buy repossessed homes at auction. I shouldn’t laugh but i did.

Buying A Repossessed Home At Auction

Sunday, May 10th, 2009

Why Buy At Auction?
Buying at auction can give a purchaser the opportunity to secure a purchase immediately with no possibility of gazumping. It may also offer an unusual or challenging opportunity. However, you must ensure that you know exactly what you are prepared to take on and what you are prepared to pay. It is very easy to get carried away when bidding against others. All bidders must be in a position to proceed with a sale and the 10% deposit must be available at the point of the hammer fall.

In Preparation
- View the property as many times as you need to ensure it is right for you.
- Have a survey and ask a trusted builders opinion of likely costs before setting your budget. You cannot withdraw from the sale at a later date if problems subsequently come to light.
- Make sure you are fully aware of the legal implications and likely costs involved in buying at auction. The auctioneers will have all the documents relating to the property. Ensure you read these in detail or ask your solicitor to do so.
- You must have the full amount you will need to buy the property available. If you are financing the purchase through a mortgage, you must have your mortgage offer and a deposit, typically 10% of purchase price, in place prior to the auction.
- Have buildings insurance prepared in anticipation of a successful bid.
- The auctioneer will advise whether you have the opportunity to submit an offer prior to the auction date. However, you will still need to be in a position to exchange contracts almost immediately in order for the property to be withdrawn from the auction. If you cannot be there on the day of the auction inform the auctioneer in advance, they can either bid on your behalf or convey your telephone bids. It is also possible to send a trusted 3rd party to bid on your behalf but they will need your written consent.

On Auction Day

- It is always advisable to check that the property is still available before you go to the auction.
- Ensure you are aware of any last minute amendments to the catalogue details.
- You will need to bring two forms of identification, your solicitor’s details and your deposit, which can be in the form of a bankers draft, building society cheque or a personal cheque.
- You cannot pay by cash or credit card. You may also be liable for additional auction costs so this will also need to be allowed for.
- Don’t bid more than you can afford or have agreed with your mortgage lender.

When the Bidding Ends
This will mean the property has either been withdrawn because it failed to reach the reserve price or it has sold to the highest bidder.
If the property was withdrawn, it is possible for any interested parties to open negotiations directly with the seller of the property. Your auctioneer will advise you in this instance.
If the hammer falls and the property sells to the highest bidder, the contracts are automatically exchanged and the buyer is liable for the deposit. The balance will be paid upon completion, the date for which will be specified in the legal documentation.
If a buyer or seller subsequently defaults on the sale, they will lose the deposit and may also be subject to legal proceedings to recover other costs.

Home Repossessions Up 68% on Last Year

Saturday, May 9th, 2009

The Birmingham Post has reported that in 2008 the number of Repossession Houses has soared up by a mammoth 68% in comparison to figures from 2007. This is expected to create further home repossessions in 2009. The Financial Services Authority have stated that “borrowers were increasingly struggling to clear their arrears, and this led to the total number of people who were behind with repayments steadily increasing since early 2007.” You can read about it here.

UK Scheme to Avoid Home Repossession

Tuesday, May 5th, 2009

A new scheme to help people with their mortgages has been designed to avoid repossessions that were seen in the 1990s, the Prime Minister said.

The plan to help recession-hit families avoid having their homes repossessed comes into force on the eve of the Budget.

Some hard-pressed home owners will be able to reduce monthly mortgage payments for up to two years after lenders representing what officials said was more than 80% of the market agreed to offer support.

Gordon Brown told high-ranking representatives of advice and consumer organisations at a meeting at Downing Street: “We want to help people through this downturn. People’s homes are so important to them, and rightly so.

“We don’t want to return to the days of the 1990s, when there were repossessions.”

Details of the institutions signed up – not all of whom had taken up the Government guarantee to cover defaults on deferred payments – will be announced to MPs by Housing Minister Margaret Beckett later.

The Homeowners Mortgage Support (HMS) scheme is designed to offer “breathing space” for struggling households.

Any reduction will have to be made up once the period is over. It is unclear how many lenders offering help are doing so as part of the Government scheme – with a guarantee backed by the taxpayer – and how many are offering “comparable arrangements”.

Mr Brown told representatives of organisations such as Shelter, Citizens Advice Bureau and Which? that some building societies had joined the scheme who they might not have expected to do so.

He said that measures which had already been taken, including help for people with their mortgages if they were unemployed, were helpful.