Repossessed Homes

If you are a first-time home owner and are looking for buying properties at a bargain price, then buying repossessed homes in auctions are a great option for you. In 2009, over 46,000 homes were repossessed in the UK and this has given opportunity to first-time owners to take advantage of the situation. Repossession properties are often sold under the normal market value which can provide big savings. This short article will give you useful tips to help take the right steps to take advantage of these savings at repossessed property auctions.

1) Do Research
First, it is always best to do research on the market to find out what prices are a good deal. Many repossessed homes are advertised by banks through their local bulletin boards and local newspapers. Banks will advertise a ‘Notice to Offer’ regarding repossessed homes in the hope of getting higher bids from prospective buyers. It is best to check online with the different repossessed houses that are offered so that you can check and compare the prices. You can also order catalogues from auction organisers so that you can browse what is available ahead of time. Additionally, you can also contact your local real estate agent for repossessed home listings.

2) Arrange A Visit
If you have found a home that you like, it is always best to visit it before the auction. One must bear in mind that repossessed houses are not always in good condition. Most previous owners would not have the money for maintaining the house and therefore would have a few kinks such as leaking rain gutters and the likes. It is best to take with you a professional surveyor so that they can assess the structural integrity of the property. Visiting the house would also allow you to check the location and neighborhood. It is best to check accessibility and safeness of the neighborhood.

3) Auction Tips
After visiting the property, it is also best to visit an auction for a trial run. This is especially important if you are a first time bidder. This will help you acclimatise yourself with the process. As with any auction, it is best to keep your cool, even if you have another bidder going up against you. Beforehand, you should determine your maximum price and stick to it. In auctions, one the hammer goes down, the deal is closed and most of the time, you would not be able to back out. At times, there will be other bidders who will push the price higher and higher exceeding the property’s actual value so make sure you don’t end up being dragged into a bidding war.

4) Deposit and Fees
If you have successfully won the bidding, you will need to fork out a deposit of 10% at the day of the auction which will be lost if you do not push through with the purchase. Most transactions will be required to be settled within 28 days of the bidding. It is important to give a sufficient buffer for your budget for other additional fees. Survey fees will be essential so that the property can be surveyed for its current state. This is not something that a home owner can skimp on. Additionally, most auctions will also require you to pay an administration fee to the auctioneer which typically falls between £175 and £300 plus VAT. For stamp duty, the home owner will have to pay 1% for properties costing between £175,000 and £250,000 and 3% on properties costing between £250,001 and £500,000 and so on. You might also need to pay Solicitor’s Fees when processing the legal documents of the property. Aside from these costs, one should also take note of other costs such as legal costs, renovation costs and insurance costs. Some properties will also have balances with water, electricity and gas bill or would even entail you to have it reconnected. Therefore, it is important to have sufficient funds to sort it out. If you will mortgage the house, you should also prepare for future mortgage payments so that hopefully, the same fate of property repossession will not happen to you.

Buying repossessed properties might seem daunting and intimidating at first. But there are a lot of agencies and web sites that one can visit to do research before engaging in such purchases. www.repossessedhomesinfo.com contains a lot of information regarding property repossessions. It is also best to seek assistance from other home owners who have purchased their homes from these kinds of auctions to be able to get tips and advices in buying repossessed properties.