Repossessed properties

A growing trend in the way first time home buyers grab a bargain is in repossessed properties. Property repossessions are increasing year after year. Although this could have a detrimental effect on the property market in general, it offers first time home buyers the opportunity to purchase an affordable home.

However, this can also mean difficulty in locating repossessed properties since many mortgage buyers refuse to reveal that they are selling repossessed properties. This is because they want to be seen as friendly, not evil.

The best way to locate repossessed properties is through your local realtor or mortgage lender. And even though the lender may not want it advertised, they do want to make money and will welcome your curiosity.

Keep in mind though, that repossessed properties are usually not in the best of shape either out of neglect or the former owner may have inflicted damage to the house and/or property before leaving as a form of revenge.

Also, check out the location—neighborhood, etc. There may be a reason why the original owner lost the house. Perhaps they did try to sell but the house was too close to the airport, or in a bad neighborhood, or a race track is being built next door. All are important factors in deciding whether or not to purchase such a home either to reside in or to resell.

When buying repossessed properties at auction several things should be kept in mind. Besides being a good buy, which they certainly are, the purchasing process is totally different. When you bid on the repossessed properties, you have legally committed yourself to a sale. A final bid acceptance becomes a contract and you cannot pull out. In the same turn, the vendor cannot pull out of the sale either. Thus, once your bid is accepted you must have the finances available to complete the transaction, usually within 30 days. You must also have a deposit ready the day of the sale and is typically 10% of the total purchase price. So, if you are outbid, you must let it go if you cannot afford to pay more.

The best approach to a first time auction buyer is to go to one and simply watch and listen. Afterwards you can ask the auctioneer any questions you like.

In closing, before you bid on any repossessed properties, do the research. Talk to the Realtor or mortgage lender and have them do a title search if possible; have an inspection done if possible; check for any special conditions of sale; and thoroughly view the property.

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