In general terms, repossessions are properties that a financial institution takes back from a buyer when he fails to make due payments for the property. When purchasing a house financed by a bank or other such financial institutions, the buyer agrees to have the house repossessed in the event that he fails to pay his installments and goes beyond the grace period provided for in the contract. The house becomes a form of collateral and thus guarantees the payment of the housing loan.
For people who are in the market for a house, repossessions are good bets. Here are a few tips when planning to buy a “repossession.”
Research on the repossessions in the area.
Just as with buying any property, you must do your research. Remember that a repossession is not always a good deal. Find out things like transportation, schools, employment opportunities in the area and the general reputation of the neighborhood. You don’t want to live in a house in an area with a very high crime rate and prone to street flooding.
Get a good mortgage deal for buying repossessions.
Find a good and reputable financial institution that can give you a good mortgage deal. A broker that is personally known to you is the best bet, or one that has a well-established reputation.
Get the deal done.
Remember that when you plan to buy a property and that includes repossessions, the seller is not bound to take the property off the market even after you they have accepted your offer; try to get the deal done as soon as possible. However do not sacrifice all other factors just to close the deal. Do your research and consider all the factors involved in making an informed and intelligent decision. When you offer to buy a house, you would have it surveyed and you would be paying legal fees and such to other professionals. If the institution decides to sell the house to someone else because you are taking too long to decide, those fees would all be taken for naught.
Don’t buy a hopeless repossession.
Just because it is selling for the lowest price doesn’t mean it’s a good deal. They are selling it cheap for a reason. It could be in a worse condition that it initially appears. You need to hire a surveyor to check and inspect the state of the property and give you an accurate report. Check whether or not the utilities have been cut off and include this in the consideration for your offer.
And finally, make sure that all attachments to the house have been satisfied. You don’t want the previous owner’s creditors showing up at your doorstep one day claiming to repossess the house for non-payment. Give all the creditors (check the deeds for this), and verify the status of the creditor’s debt. As with any potential purchase, always be vigilant and keep a close eye on the details of the sale, the property and the terms of sale. After all, it is your money and your property.
This article was contributed by Willie Nelson, a UK property consultant offering the best ‘buy my house’ solution for UK homeowners.