The purchase of repossessed property has become quite a favourable option amongst first time buyers. The recent increase in the supply of repossessed property has created quite an optimistic spirit over this unique opportunity for investors and first time buyers.
A good example of the benefits would be to look at a situation where a person is merely looking for a house of their own but due to a tight budget can’t afford property priced at the full market value. This potential purchaser is now able to look into buying a repossessed property at a substantially cheaper price. These repossessed properties were reclaimed by the lender due to the debtor's inability to keep up with monthly instalments.
Before such repossessions, a grace period is given to the owner in order to offer the opportunity to repay the missed instalments or to approach the bank with an alternate but suitable payment plan. Should the owner still be unable to repay the outstanding amount during this grace period, the ownership of the property then falls to the bank who may resell it again.
Consider the following should you wish to purchase a repossessed property;
1) Even though a repossessed property is a favourable option, they are tricky to find. A reason for this is that a loan buyer is unlikely to disclose the fact that the property is currently going through repossession. This is done in order to uphold a certain image and to avoid the label of ‘home breaker’. Online property listing companies however, are able to provide you with an extensive list of available repossessed properties.
2) As you may already know, when looking to purchase a repossessed property it is important to remember that it may not always be in a good condition. This may be due to a shortage of money or the fact that not every property is situated in a appropriate area.
It’s a common misconception to say repossessed properties are sold at dirt cheap prices, however, this all depends on the outstanding balance still owed on the loan.
3) When it comes to bank repossessed property, two surveys are made to assess the market value. When the price is established, the propertyis put up for auction where the highest bidder is the winner.
With a few simple repairs and renovations, a repossessed property holds the potential to become a very profitable venture. Finding a repossessed property however, is a process that should be approached with patience and revere.