How do you buy a repossessed home?

Buying a home can be an exciting experience but it can also be a difficult one. There is the question of location, price, as well as the type of home are you looking for. Is it a new or old build? Is it a traditional home, a flat or a bungalow perhaps? Do I want to buy a property from the current landlord, or do I want to buy a repossessed home? 

This final question is one people often don’t ask themselves, with many house hunters or property developers simply dismissing the idea either due to a lack of understanding of how buying a repossessed home works or having negative preconceptions around purchasing and owning a repossessed home.

Put simply, a repossessed property, also known as a bank-owned home, is one that has been seized by the bank as a result of missed mortgage repayments by the borrower. These properties are then listed by the bank for sale in order to recoup the costs of the initial loan given to the defaulting borrower. . 

While the number of repossessed homes available has fallen in recent years, there was still a total of 4,580 listed in the UK in 2019. These properties can therefore provide buyers the opportunity to own a property they may not have been able to find otherwise through more traditional means.

However, finding repossessed homes for sale near you can be difficult if you don’t know where to look. It is also vital to understand the necessary steps involved in securing one, as they differ slightly compared to purchasing a home through more traditional means. To understand the steps involved in how to buy a repossessed home, we’ve put together the five steps you should follow for success: 

1. Find listings for repossessed homes

One of the most common questions we hear when it comes to repossessed homes is arguably the most important one – how do you find repossessed homes to buy?

Banks don’t often advertise when they have recovered a now repossessed home and listed it for sale, so to find them you’ll need to go to the places where the banks have listed them instead of directly to the bank itself.

Many are simply featured by estate agents or in the local paper. The only downside is that many estate agents do not always explicitly specify the home is repossessed, plus the home may simply get lost between all the other traditional listings. Local papers also run into a similar issue, with many getting no more than a tiny ad on one page of a newspaper that will often go unnoticed.

A better way is to seek out an auction that as well as selling standard homes, also sells repossessed homes. You may find some auctioneers advertise their repossessed homes differently; some may have a dedicated area, some may simply have a notice on their listing stating it is a repossessed house, while others may require you to get in contact and enquire. While this does mean doing a bit of research, it can lead you to finding a potential property others may not yet have their eyes on if you’re able to get in early. 

2. Assess the repossessed property

Once you’ve found a couple of repossessed properties you wish to investigate further, the next step is the same as if you were looking to buy a more traditional home, and that is the process of visiting the property itself.

If you found the property through an auction site and it’s listing is available online, then you will typically be able to find out more information about the specific property here, 

including information about who you will need to contact should you wish to arrange a viewing.

One thing to note about repossessed properties is that you may find they require some degree of renovation. If you are new to buying property at auction this may come as a bit of a surprise, yet those who have experience buying property at auction will know that it is not uncommon for homes at auction to require some degree of renovation before being suitable for permanent residential use. As such, it is important to factor in any work that you would like to be done before moving in. 

3. Confirm the current occupancy situation

It is important to note that a bank can list a repossessed home for sale even if the current borrower has not officially handed over the keys. While the idea is that by the time of sale the keys would have been retrieved by the bank, this back and forth can lead to issues if you’re wanting to move into the property promptly. If in doubt, ask the seller and see what the current situation is with the previous owner. 

4. Get a mortgage in place

Unless you are intending to pay for the property upfront with cash, you will want to ensure you have a mortgage agreed in principle before placing a bid at auction. 

The good news is that securing a mortgage for a repossessed home is the same process as you would follow for any home. The only difference is that completion is typically quicker when buying a repossessed home, which is great news for those looking for a quick sale and a new home to move into quickly.

5. Confirm the sale 

With a repossessed property found and a mortgage in place, the only thing left to do is to confirm the sale itself.

If you are intending to purchase the property through auction, then you will still have to win the sale on auction day. Bidding at auction can be an intimidating experience if it is your first time, so if this is the case we recommend reading up on what to expect to give you the best chance of success on the day.

If you are the winning bid, then you’ll be given a deadline to pay and complete the process. The deadline dates can vary from auction house to auction house but it will typically be between two and six weeks.

Once payment is completed and the paperwork signed, the house is yours.

Repossessed Homes For Sale 

If you’re interested in purchasing a repossessed home, then look no further than us here at Clive Emson Auctioneers. For more information about homes we currently have on offer, as well as upcoming listings, why not contact a member of our team today?