Buy Repossessed Houses at Auction

The housing market is in crisis, estate agencies areyou money and you need to be prepared.
closing hand over fist and unemployment’s rising.The same as an ordinary house purchase, buying at
To top things off, hikes in the cost of living areauction requires a deposit. You’ll generally need
making life very difficult for homeowners whoto fork out 10% of the purchase price, which means
stretched their finances too far when house pricesyou need to have a firm grip on exactly what you
were high.can bid based on how much cash deposit you can
But there’s a bright side to every story. Thescrape together. You pay the deposit as soon as
positive slant on this terrible situation is that there areyou’ve bought a property, before you leave the
an increasing number of opportunities for buying aauction house.
repossessed house. If buying a home of your ownAfter that you have 28 days to pay the balance, no
has been an unreachable dream for the past decade,excuses. Buying a repossessed house at auction is a
it might soon be a reality. Interest rates are at an alllegally binding contract and you can’t back out.
time low and mortgage rates should eventually follow.Because the wheels of mortgage lenders tend to
If you’re a first time buyer without a propertyturn very, very slowly it’s wise to get your loan
to sell, the world’s your oyster… provided youagreed before you go anywhere near an auction
can borrow the money.house.
Obviously there are advantages and disadvantagesIn difficult times, auction mortgages are as rare as
to buying a repossessed house or flat. The smootherordinary mortgages. There are fewer deals around
you can make the process and the more pitfalls youand - perhaps unsurprisingly - nobody seems to be
can manage to avoid, the more successful your firstadvertising auction-specific deals. The first port of call
step onto the property market will be.should be your bank. Provided you have a good
Most people think auctions when they think aboutrelationship with them, they should be able to give
house repossessions. And that’s a good place toyou a very fast decision about whether or not
start. The USA has a database of repossessedthey’d be prepared to lend the money to buy a
homes but the UK doesn’t, and many UK houserepossessed house.
repossessions are sold at auction by lenders.Once you know what your bank can or can’t
Household name auction house Allsops is anoffer, it’s a good idea to let a Mortgage Broker
independent property consulting company with a solidloose on your case. Independent brokers, unlike tied
reputation for residential property auctions. Probablybrokers, have access to the entire UK mortgage
the UK’s biggest, they sell around a billionmarket and can trawl around to find you the best
pounds’ worth of homes a year at auction,deal. And they know the lingo, which helps. A tip:
spread across seven massive auctions a year withremember to tell your broker that you want a
between 250 and 350 properties at each auction. Amortgage specifically for buying a repossessed house
good choice if you feel safer dealing with a wellat auction. He or she will co-ordinate your mortgage
known brand name. But there are also local propertyapproval date with your chosen auction date so
auctions in most major towns.everything is ready in good time.
Estate Agents also sell repossessions, although they
don’t always proclaim the fact. You’ll haveBut what of the future?
to actually go in and ask. Another route into buying aWill we all be knee deep in low cost repossessed
repossessed house is to simply ask around the bankshouses and flats for the next decade? Are property
and building societies in the area you want to buy,prices due to keep falling, or will they recover?
personally. While they don’t openly advertisePredictions are mixed.
repossessions they need to sell the repossessions onSavills is another of the property big boys, a leading
their books and they’ll probably be happy to givename in UK residential estate agency and commercial
you details. Another simple way to find repossessedproperty. While they don’t auction repossessed
homes for sale is check for announcements in thehouses they do a great deal of research into the
local papers. Offers are always publicised in case ahousing market and their views are well respected. In
better offer comes along, to ensure the bestan article published in The Times on 14th November
possible deal for the seller.2008 Savill’s Head of Residential Research
The internet has revolutionised buying repossessedYolande Barnes said,
houses. There’s a good choice of specialist online“… the roots of Britain’s downturn lie in the
providers who collect together UK housecredit crisis and the consequent withdrawal of funding
repossession auctions in one place so you can searchby lenders… The UK housing market really is a
them effectively from one place,different country: in the US as many as one
Repossessedhousesforsale.co.uk is one. They hold ahome-owning household in 16 has defaulted on its
database of UK auction properties including details ofmortgage or faces repossession, compared with
local auctioneers and auction dates, and provide linksfewer than one in 200 in Britain. To predict that the
to online auction catalogues, property details andUK housing market will fall by 40 per cent and remain
guide prices. A great way to save time.at these new, corrected levels is to ignore the role
Whichever route you arrive at an auction by buying aof finite supply and the use of equity.” In other
repossessed house at auction can save you awords, don’t be fooled by all the doom and
fortune in estate agency fees. But it’ll still costgloom.