Buying Repossessed properties

In the past you may have heard people talk about buying a repossessed property which has made you think this is something you really need to do. The most common statement you may of heard is, “we bought a house really cheap, it was a repossessed property.” In the past this was very much the case, however these days there is an importance on whoever is acting for the lender to obtain the best possible price for the property.

There are a couple of ways in which you can purchase a repossessed home, for example at auction or through an estate agent. If you are considering buying a repossessed house at auction, I highly recommend that you carry out your own due dilligence prior to attending any auction as failure to do this could result in losing thousands of pounds. In this article we will look at some of the pros and cons that lay within the process of buying a repossessed property, through an estate agent.

As with anything in life there is a process to everything we do and buying a repossessed property through an estate agent is no different.

Process -

Put in offer

Offer accepted

Goes to Publc notice in local media

Opportunity for another buyer to put forward a better offer

Negotiaitions / Bidding war

Timescale – must complete within 28 days

Successful purchase and completion of property

Let’s take a look at each step of the process begining with, putting forward your offer. This will be like any other property buying stage whereas you negotiate and agree a price with the estate agent. It will probably be at this point you find out it is a repossessed property as the estate agent will inform you that they are dealing with a corporate client (a company that handles the sale of the house on behalf of the mortgage lender who repossessed the property initially).

Once your offer has been accepted it will go to public notice. An advert will be placed in a local newspaper notifying the public that your offer (it will state the amount in pounds) has been accepted, and that if anyone wishing to put an offer forward, the estate agent’s contact details of who is handling the transaction. It is at this stage you may very well enter in to a bidding war.

Within a short period of time it is common that the original buyer is contacted by the estate agent to notify them that a better offer has now been accepted on the property, and if that you (the original buyer) may wish to consider increasing your own offer. It is at this stage of a repossessed property buying transaction that I feel the house buyer is treated extremely unfairly. If you are to ask the estate agent what the better offer is, they will tell you that they can not disclose this information, therefore putting you in an awkward position of enhancing your offer. When you are bidding on a repossesseed property it is not always just the purchase price that is deemed a better offer. Timescale and the position that the other party may be in to complete on the sale of the property i.e. they do not need a mortgage, or they have already had a valuation on the property and may already have instruted a solicitor may be deemed as a “better offer”. A majority of the time you will find that it is the purchase price that has increased therefore you will need to increase your own initial offer. This is where some of the due dilligence you need to do at outset comes in to play, you will need to know what is the maximum price you are prepared to pay for the house. You may also find that the estate agent will come back to you on several occassions with the news you have been out bid therefore you may need to increase your offer on a number of occassions.

Whilst the bidding war is in progress you normally would have initiated the whole house buying process to comply with the 28 day timescale to completion that is required. Therefore one of the major implications of being out bid on a repossessed property is that you may have already incured costs i.e. Valuation fee, solicitors costs. As a result of being unsuccessful in buying the house you could find yourself out of pocket in the way of several hundreds of pounds.

Alternatively once you are successful in purchasing the house you will need to make sure that your solicitor gets all legalities completed in a timely manner.

I feel that there are still deals to be done when buying a repossessed property however carrying out a good amount of due dilligence intially will serve you well. Although you have seen that purchasing a repossessed property will come with it’s fair share of hassle, it may very well be worth it in the long run. 

 

Why use a house buying agent?

If you were to think about the house buying process most people automatically associate an estate agent as being an integral part of this transaction. However a majority of people do not realise that an Estate Agent works solely for the vendor (the person selling the house). Very few people are aware that you can employ the services of a buyers agent, who will work solely for the house buyer.

Have you ever been to a house viewing whereby the estate agent showing you around is asking questions about why you are buying, what is your ideal budget or maximum budget, and what are your overall circumstances etc etc? Ever asked yourself why they are asking these questions? They obtain this information so they can feed it back to their client (the seller) about your circumstances.

Why do people use an estate agent to sell their property? Most people say the main reasons for using an estate agent is because of marketing exposure and negotiating best deal on their behalf. When it comes to negotiating the best deal on the sale of their house, people feel that estate agents are experts in this area.

Buying a home can be the biggest investment we ever make in our lives, therefore why wouldn’t you as a buyer, consider utilising the services of a professional negotiator to obtain best deal/lowest price on that new house. Most members of the public who are thinking of buying a home are not even aware of this type of service. A buyers agent is commonly used in other countries around the world, for instance in America a majority of house sale transactions involve both an estate agent (representing the seller) and a buyers agent (representing the buyer).

There are many benefits to enlisting the services of a buying agent.

Buyers agents have a track record of saving thousands of pounds off the list price for house buyers.

A buyers agent will take the “emotional attachment” out of the negotiating process on behalf of the buyer. How often have you heard an estate agent say “there’s a lot of interest in this property. You will need to offer close to asking price and quickly”. If you have viewed a house which you have fallen in love with, hearing something like this from the estate agent could potentially cost you a lot of money. You may just offer close to, or the actual asking price as you are already in love with the property and feel you need to offer this to enable you to secure the property. This is another area that a buyers agent can really add value to you. A buying agent will say the right things at the right times on the buyers behalf.

Making the house buying process quicker and less stressful for the buyer. This is achieved by dealing with all parties concerned (mortgage adviser, solicitor, and the estate agent) throughout the purchase transaction on behalf of their client, the buyer.

A buying agent does what it says on the tin, they are an agent to the buyer!

House Price Negotiators Ltd (HPN Ltd) have strategically aligned our main objective to our clients main goal……saving as much money as possible off the list price. HPN Ltd negotiates the sale price with the goal of getting the best possible deal for their client. Everything HPN Ltd does is for the benefit of the house buyer

Tips on buying a house

2.  Detail your requirements
Think about what you are looking for in a property – how many bedrooms you require now (or maybe in the near future) whether you need off road/on road parking, how small or large a garden you require. If it’s a flat or house you need and pick cerrtain areas on which to focus your search. Consider all aspects regarding the location you require for example: what are the schools like, is it well situated for transport links and shops? You should list the sort of amenities you desire nearby and what you ultimately want from the property’s location.

Tips on buying a house

1. Get your finances in order

 Contact an independent mortgage broker to find out how much you can borrow. They are able to research the market place for the best deal and can help you maximise your borrowing power. Make sure to stay within what you can comfortably afford regarding monthly repayments. Obtain information in relation to the different mortgages on offer, and consider whether you want to go for a fixed or variable/Tracker deal. It is important that you tot up all the money you have at your disposal for use as a deposit. Don’t forget to account for house purchase set up costs + moving in costs (any good independent mortgage adviser should run you through an estimate of the set up costs) the objective of this exercise to make sure that prior to viewing properties you are fully aware of the costs you will incur during the purchase process.

HPN Ltd can help you with buying a house

House Price Negotiators (HPN Ltd) is here to assist you with the house buying process.

From the start of the process, getting your house in order (breakdown of buying costs/moving in costs/hints & tips on what to & not to say to the estate agents etc) right through to the  completion of your new house purchase.

Our main objective is aligned to your main goal…..agreeing the lowest price on your new home.

We have a proven track record of liaising with estate agents on the buyer’s behalf, not only with securing the best price for the house, but also making the whole process stress free. For furhter help & advice feel free to give us a call for an informal chat on how we can exactly assist you.

HPN Ltd working for the Buyer!

House Price Negotiators (HPN Ltd) can confirm that we work for the buyer!

Buying a home is probably the largest commitment we will ever make in our lives. Why not make sure that you enlist the services of a professional, full time negotiator to liaise on your behalf with the estate agent. Not only to save you thousands of pounds, also we make the house buying process stress free!

We say the right things at the right times!