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If you are interested in buying a property cheaply as a potential investment, one of the best options available could be purchasing a foreclosed property (otherwise known as a repossessed property). Doing this can be quite daunting, and a few different options are available to you, so this guide has been prepared to steer you in the right direction. <br>
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Contact Hello, Sign in Register Property Classifieds The Home Of UK Property Resources Home / Blog / A Guide to Buying Foreclosed Properties Via Bank Auctions in the United Kingdom Back to search results Marketed By: LIKE Print Posted on 29/05/2023 by Property Classifieds Press A Guide to Buying Foreclosed Properties Via Bank Auctions in the United Kingdom Property Classifieds Press London, England N6 5AP United Kingdom
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If you are interested in buying a property cheaply as a potential investment, one of the best options available could be purchasing a foreclosed property (otherwise known as a repossessed property). Doing this can be quite daunting, and a few different options are available to you, so this guide has been prepared to steer you in the right direction. The first thing that you need to do is put aside any emotive image that you associate with the term ‘foreclosed property’. You also need to know where to look for your foreclosed property, as there are a few options, but some are much better than others. What is a Repossessed Property? First, you should be aware of what a repossessed (or foreclosed) property is. It is a property that has been seized by the mortgage lender (or whoever the relevant finance firm is) because the previous homeowner could not make their mortgage payments or commit to other financial arrangements. There are several reasons why people might default on their mortgage payments, such as losing their job or a significant change in their personal circumstances. Mortgage lenders are happy to provide alternatives, but if no chance of repayment is possible, the property will be repossessed. Buying a Foreclosed Home in the UK One of the most popular ways to buy a foreclosed property in the UK is to keep an eye on different property auctions. There are a lot of sites that list different auctions investors might be interested in. This process can be intimidating, so it might be worth contacting experts if you feel the process is daunting. You should know the location you would like to buy in and what kind of budget you are working with. This will allow you to narrow your options to make a much more informed decision. Again, some websites provide you with plenty of different options you can take advantage of to find the perfect foreclosed property for you to invest in. You should also remember that even though you are buying a property for a bit of a discount, the previous owner will have more than likely removed most of the fixtures and fittings. This means there will be added cost in refurbishing the property to become liveable, and you can sell it for a profit. Some (but not all) of the different fittings you will likely need to replace include the likes of radiators, fireplaces, integrated white goods and light fittings. Can You Buy a Foreclosed Home from the Bank? Yes, the most common route to buy a foreclosed property is at an auction, but there are some instances where a bank or another lending institute will choose to go through an estate agent instead. There are a few reasons why this might happen, but one is that they could get a higher price if they go through an estate agent, given they are obliged to get the best price possible. Banks may opt not to use an estate agent because they want the sale to go through quickly. This is because lenders usually want to achieve a quick sale to clear the debt, so they don’t have time to waste. With this in mind, you should contact your local estate agents and let them know you are interested in purchasing foreclosed properties. A lot of the time, with properties like this, you need to network to get the best deals. Some estate agents, if they know what kind of property you are looking for, what your budget is and that you are serious about your purchase, will let you know about properties before they officially go on the market. Is It a Good Idea to Buy a Foreclosed Property? So, it’s clearly possible to purchase a foreclosed property, but that begs the question, should you? Well, it’s certainly worth considering, given you will buy it for below market value and as such, it’s an excellent investment opportunity. However, there are some issues that could arise which you will need to think about; these include but are not limited to some of the following: 1. The utilities will have been disconnected, so you will need to reach out to the right organisations and negotiate whether they can be reconnected and at what cost. It’s likely that the utility providers will reconnect them for free, but others, like the phone provider, will probably charge. 2. The address's credit rating will be very poor, so it will be your responsibility to monitor it and try to improve it if possible. Send to Friend The previous owner will probably have been in debt; hence the property has been foreclosed. You should note that you are not responsible for the previous owner's debt, regardless of who is attempting to collect it. If bailiffs ever visit, simply explain what has happened, prove your identity and don’t let them enter the property. Do You Need Help Buying a Foreclosed Property?
If you are interested in purchasing a foreclosed property but need some help, you will be happy to know that plenty of organisations are willing to lend a hand. One of these is Property Classifieds. At Property Classifieds, our team of experts is on hand to provide you with whatever financial advice you need and also show you some of the best properties that have been foreclosed and which, therefore, you could purchase for below market value. If you have any questions or require further information, do not hesitate to get in touch. Share This Page
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