The Pitfalls of Buying a Repossessed House

Repossessed properties are usually advertised as such. The vendor is a bank who has a mortgage on the property. The owner has failed to make the repayments. The bank has obtained possession either by having taken the necessary legal steps to evict the owner or the owner has voluntarily given up possession and handed in the keys to the bank. The bank’s agents can then enter the property, change the locks and put it up for sale. You must remember therefore that you are not buying from a proud owner who wants to present his or her property in the best possible light to get the best possible price but from a bank which has already suffered a loss on the property and wants to dispose of it as soon as possible to minimise that loss. The bank will want to sell the property as it stands and will not want to go to any expense if it can avoid it.
It is very likely that repossessed homes will not be in show house condition. They may have been left empty for some time. Fittings, such as boilers, oil storage tanks, kitchen units, which normally go with a house, may have been removed and sold by the poverty stricken owner (who will have no love for the bank) in order to fund emigration to Australia or some other destination. This will reduce the price but be careful; caveat emptor, buyer beware, very much applies. If the electricity has been cut off for two years because the bill has not been paid, although a new owner cannot be made liable for the arrears, a new owner may have to pay a re-connection charge which can be expensive. If the house is old enough and the electricity has been cut off long enough an electrician’s certificate may be needed and if the electrician decides that the electrics are not up to standard you could be faced with considerable expense. It is also possible that worthless furniture or other effects belonging to the owner may be left in the property and you will need to ascertain if these are going to be removed prior to completion otherwise you shall have the expense of their disposal. It is strongly recommended therefore that you inspect the property thoroughly, check that all utilities are in working order and have a detailed professional building survey carried out before contracts are signed.