Discover How To Quickly Find Hidden Repossessed Houses For Sale

 

Repossessed properties for sale metal grates

Let’s get straight to the point, you know Repossessed Houses &  Distress Properties that are for Sale offer lots of potential for your property investments…

 

But the secret is in knowing how to find them right?

 

Below I will show you how….

 

Dealing With Mortgage Companies

 

Mortgage companies often try to hide the fact that they are selling repossessed houses as they feel it may devalue the property and lead to a lower sale, often also known as below market value houses.

 

This is misguided though in my opinion as often when buyers know it’s a repossession it can generate a lot more interest and push up prices (good old supply and demand)

 

But until mortgage companies have a change of heart it can be difficult to spot which sales are repossessions unless you know where to look.

 

This is where I would like to help you and give you the upper hand in your property search, to help guide you on how to find repossessed properties for sale.

 

Mortgage companies will either choose to sell the properties in one of three ways…

 

1). Estate Agents

2). LPA Receivers

3). Auction Houses

 

As a rule of thumb most individual repossessions that were once owner occupied will be sold by estate agents.

 

Most portfolio properties that were on buy to let mortgages and owned by landlords will be sold by LPA receivers,

 

And finally auction houses tend to pick up all of the properties that fall between the cracks and can’t be sold for a suitable price using either an Estate Agent or an LPA receiver.

 

This is because auctions all being fair and equal are the best way to show that a mortgage company has tried to sell the property for the best price and given it the best opportunity to find a buyer, after all they just want to cover their backs and clear the debt.

 

For the purpose of this blog though, as buying properties at Auctions and through LPA receivers is more specialist than the average investor may want to try, I will only concentrate on estate agents here, but I wanted to mention the others so you know all the avenue’s to look at, if repossessed properties and distressed property sales is definitely what you’re looking for.

 

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Dealing with Estate Agents

 

 

When I used to work for an estate agent in 2006-2007 we dealt with quite a few repossessions. The script was always the same, ‘Don’t tell any buyers it’s a Repo’! … was the message passed down from the bosses

 

So as an agency we were to market it as normal and conduct viewings on it as normal.

 

Repossessed houses for sale boarded up This is all well and good until you get to the property and you have to explain why the windows have boards on (note: not all repossessions do, so keep a look out for other tell tail signs),

 

the toilets and sinks have what looks like police tape across them saying ‘do not use’ and the place looks like a ghost scene with personal items left throughout the house but the feeling its clearly not lived in.

 

It’s a weird feeling and quite eerie, and pretty hard to explain to interested viewers without them asking the question…. is this a repossession?

 

You see, mortgage companies aren’t hands on with repossessions. They have to be seen to get the best possible price, but there not experts in selling houses, there just finance companies, so they like to pass the buck on to the agents to do all the work. But then they tie the agents hands throughout the whole process stopping them from doing their work properly.

 

Which leaves trails or ‘signs’ that the property is indeed a repossession that is very difficult for estate agents to hide.

 

Some properties are more obvious than others, but if you know what you’re looking for then it’s easy to turn detective and spot the signs, and then finding repossessed properties for sale in your own town becomes much easier.

 

 

How To Spot A Repossessed House is for Sale

 

 

There’s two main avenue’s to spotting repossessed properties that are for sale and the first starts before you even get to the viewings.

 

As the mortgagee (mortgage lender) needs to be seen to achieve the best possible price (as they are legal bound to), they always invite extra bids on a property once an offer has been made, until the sale exchanges.

 

This can be infuriating for buyers (and agents) as it can slow down the process, can often cause sales to fall through and doesn’t always lead to a better price.

 

But i’m afraid it’s all part of the game that needs to be played when you’re buying repossessions through an estate agent

 

As part of this process therefore the estate agent is often asked to put an advert in their local paper and on the property listings (on portals like rightmove.co.uk and zoopla.co.uk) – an example below

 

Repossessed houses for sale property listings

 

So the first role in spotting repossessed houses for sale is therefore in checking your local property listings online for wording similar to that above,  and checking in your local papers for ‘public notices’

 

If your based out of the area that you want to buy in and you don’t know which are the local papers, then it’s worth calling up the estate agents in the area, and ask, which paper they list their public notices/final offer notices for repossessed houses for sale ?

 

Or check out this newspaper website which lists all of the local papers for the country, and contact the papers direct to see if you can get regular copies or check their online editions.

 

The second avenue to spot repossessed properties for sale is when you’re actually out viewing  – or if you’ve got good eye sight you can sometimes spot these signs in the pictures on the property particulars

 

These signs (in no particular order) are:

  • Metal grates or wooden boards on windows and/or doors
  • ‘Do not use’ tap on plumbing items as the water has been drained down to prevent leaks
  • Chattel Notices in the window giving owners notice to collect personal belongings

 

 

What Happens Next?

 

Now you know where to find the repossessed houses in your area, and what to look for, it’s a case of getting out there and start viewing

 

But be careful as not all repossessed properties are gems. Here’s a blog post I have written on how to spot the pitfalls of repossessed houses for sale uk

 

Or if you would like help in finding your next buy to let investment or building a property portfolio, then take a look here at how I can help save you time and make you more money with your investments

 

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  1. Mark Hammond says:

    As a previous estate agent that deals with repossessions, can you tell me on what basis the agencies are given the contract to sell these properties by the mortgage providers and if there’s a way to circumvent this process!? Do the agencies bid for the sale of each property individually or do they have contracts with certain providers in certain areas?! If the mortgage provider is legally bound to achieve the highest market price, is there not a way to approach them directly!?

    • Robert Jones says:

      Hi Mark,

      Typically most agencies are selected or contacted by the mortgage companies to sell repossessed properties, it is rarely a case of the agents contacting the mortgage companies or bidding/tauting for properties to sell if it were.

      As part of the process of a Mortgage Lender being ‘seen’ to get the best possible price for a repossession, most mortgage companies select the largest estate agent in an area and tend to stick with them if they are doing a good job.

      They don’t want to deal with property sales, that’s not their business, they just want the repossession sold quickly so they can write it off their books and move on.

      It may seem quiet a cold approach to it, but there large corporations and aren’t really bothered in finding the agent that will provide the lowest commission etc.. just one that will stand the best chance of selling it the quickest.

      When you consider the number of properties a mortgage company may have repossessed over a period they often work with 3rd party companies called LPA Receivers who look after the management of the properties and the sale to take the burden and responsibility away from the lender

      These receivers may have some properties in the same area, but mostly they will be spread out across the country and sold at different times throughout the year.

      Because of this it is easier for the Receivers to further outsource the sale by using larger Estate agents who cover more than one area (groups like Countrywide estate agents for example), than it would be for them to use a single agency branch estate agency, when they may not need to sell a property in that area again for a while.

      Hope that makes sense and gives you an idea on how they tend to work

  2. bousebuyer says:

    hi, just looking for some advice. We put an offer in on a repossessed house, we had all finances in place and we don’t need to sell another house. However, our offer was rejected for a much lower offer, £15000 less, as they were cash buyers. I thought they had to, by law, try get as much as possible for the house. Is this right, is there anything that we can do?

    • Robert Jones says:

      Hi, it’s a tricky situation, but the short answer is ALL offers are required to be put forward to the seller.

      As part of this process in a repossession, the selling agent is the mortgage company and they will make the decision on the best offer, not the end person actually getting repossessed.

      They do need to be ‘seen’ to be getting the best possible price though, but also in a suitable time frame.

      Part of this process involves them putting notices in the local paper of the offer they have received, and inviting higher offers, as well as updating the property description on any advertising.

      The downside to this is that although most of the time they go with the ‘highest offer’ this is not always the case.

      The distinction here between offers is that the other buyer is offering cash and may have committed to a quick completion of a couple of days or weeks.

      This may be a better ‘offer’ in the eyes of the seller ‘the mortgage company’ because if your using a mortgage, something might go wrong with a survey, you may not get finance or they may pull the offer at the last minute.

      So often a cash offer can be more certain and they will accept this over a higher mortgage offer on occasion, depending on the property in question, it’s condition and the history of its listing (maybe they have just been stung by another mortgage buyer not being able to complete on the deal).

      There are lost of factors that go in to it.

      If you expect foul play you can ask the agent to confirm or prove they have given your offer to the seller, but your unlikely to get much joy from this route unfortunately

      I hope that helps give you more of an breakdown on the possible situation and has been helpful

  3. Jamie says:

    Great article. Like all property investments, it’s about finding the right deals. Not all repossessions make good property investments.

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