Repossessed Homes UK

The current economic crisis is hitting a lot of people in the UK hard. With increasing unemployment and the situation for the immediate future looking bleak, many people are being crippled financially.

With better times over recent years, many homeowners may have aimed slightly higher than their budgets would allow, with lenders providing 100% mortgages and excellent packages, buying property was never easier. Many did not consider the possibility of circumstances changing when they bought their home and agreed to higher monthly repayments in the good times. Changes in situations can mean financial difficulty can occur very quickly. For example, the sudden loss of job, a change in income, divorce, death, illness – these are all factors which can result in the amount you were earning becoming less. Changes in circumstances can ultimately lead to property repossession. Failure to keep up repayments can mean your lender going through the repossession process.

There is a well known saying, “One man’s loss is another man’s gain” and this can be applied to the procedure of property repossession. When a person’s home is repossessed, they will have the pain and suffering of losing their property following eviction. The property will typically be auctioned at a cheaper price, which is ultimately where the gain comes in for the new buyer. The new buyer will usually buy this property at a repossessed property auction.

Repossessed property auctions are becoming more and more common. They are being held regularly across the country as investors or potential buyers are taking advantage of bargain prices of property. Due to the fact that lenders will be looking to sell a property quickly in order to recover losses, the best place for them to sell is at a property auction. These ensure a house can be sold quickly as the entire process from bidding to exchange can be completed within a month. The other advantage for the sellers is that there are no refunds, so you cannot change your mind once the hammer is down.

The internet is a great place to find lists of auctions located by region. This means that you can find repossessed property auctions local to you. It’s worth contacting the auction to find out when the next auction is and try and obtain a list of the properties due to be auctioned. This means you can carry out full research so that you are prepared when arriving at auction. Be familiar with the bidding process and make sure you are aware of any fees involved.

Another good place to pick up repossession properties is by contacting your local estate agency. They often work in conjunction with auctioneers to put together auction events and sell local property – often repossessed houses. Maybe try getting to know a local estate agent in the area you are thinking of buying in. See if they can contact you once they come across any bargain properties before they go to market and therefore you can get in there first.

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 a repossessed property 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.