People say that buying a house is stressful, if that’s true buying a repossession is a nightmare. I know, I’ve been though it. I learnt a few things along the way though so read on for a few frank tips…
1. Buying a repossession is a fantastic opportunity to get the property you want, for less.
But be warned, if you see the potential then it’s likely that others will too. Before making any bids you need to get a ‘mortgage in principle’. Essentially this is an agreement between yourselves and the mortgage provider that they’ll issue you with a mortgage. Otherwise you could find yourself wasting time bidding on a property that you wouldn’t get the financial backing for.
2. Do your research
Because you don’t have a link with the previous owners, there could be some unidentified problems lurking. On top of that, the previous owners had their house repossessed because they had financial problems which then could mean they haven’t paid much attention to property maintenance. Make sure you have the proper surveys done. We have a friend who is a building surveyor, so he checked everything for us. Speak to neighbours too and find out if they know of any issues you might need to sort out. Money Saving Expert has some great advice on the technicalities of a repossession.
3. Don’t just look at the house
Check the area, walk around, and see if any other houses have been / are up for sale. Compare the prices. Nowadays you can Google the address of the property and in the UK you can get the previous selling price on Zoopla. If you’re looking to start a family or have a young one you should visit the Right Move school checker to be sure it’s the right area for you. This is partly why we got a repo. The place we’ve got has great schools but we’d never be able to afford a ‘finished’ property in the area.
4. Prepare yourself for other bids until you exchange contracts
And set yourself an upper limit. You’re not a fool for halting a bidding war. You are a fool for stretching beyond your means though. It turns out there was a last minute bidder for our property so we could’ve quite easily got gazumped. Luckily for us they didn’t make a high enough bid and we completed before they had a chance to put in a higher offer. Apparently they were willing to go up by 20k. If they had bid with that amount we would’ve been out because our refurbishing budget would be out of the window. Which leads me nicely to the next point…
5. Consider the renovation costs.
Chances are your taste doesn’t match the previous owners. It’s also likely that as a repo the property is run down or devoid of any furnishings or white goods. Estimate your costs and make sure you have a money saved just in case it goes a little over. It undoubtedly will. We didn’t account for having to reposition next door’s drain, remove a chimney breast and chop two blooming trees down.
Have you been through it? Tell me about it!
What Makes a House a Home 