If you're looking to buy a repossessed property, the conveyancing process is pretty much the same when buying directly from the owner. However, it's worth pointing out some important differences and for you to instruct a conveyancer well-versed in this type of transaction.
Do lenders always look to sell them cheap and fast?
When a property owner fails to keep up with their mortgage repayments, the lenders take possession of the property.
They're often seen as a cheaper way of g a property as the lender is presumed to want to sell the property immediately and recover the money they lent rather than holding out for a more favourable price.
But don't think it's going to be a bargain. Whether a property is sold through agents or by auction, a survey and valuation is necessary to make sure there are no defects to the building and determine its value.
What's really the difference?
One of the biggest differences is that the mortgage company may be unable to give out as much information about the property as opposed to directly buying it from the owner. The basic rule here, like other purchases, is that you look out for yourself as a buyer.
The lender has not lived in the property; hence they have limited knowledge about any repair and maintenance works done on it.
Your conveyancer may be able to get information from other sources but you're less likely to get as much as opposed to buying properties directly from their owners.
Make a thorough inspection before finalising an offer.
It is generally an obvious advice as with other types of properties you're looking to buy. While you take confidence on what the estate agent says about the property and what the pictures show, but repossessed properties may not be as well decorated. As a buyer, you can visit the property and see to it that it has been cleared of the original owner's stuff.
If offered at an auction, it's important to have a solicitor to look at the auction details and property title and have a survey done beforehand. You may be unable to withdraw as a successful bidder if the auction has concluded and a contract is drawn.
During the transfer of the property's ownership, you should not face any problems, and the mortgage lender can actually sell it in their name. A statutory power of sale will then override the original owner's title and you will acquire it free of the mortgage.
You shouldn't worry about other debts on the repossessed property.
While inspecting the property before completion, there are instances when other financial liabilities are found. Sometimes, even pending bankruptcy notices are discovered against the original owners.
None of these will be part of your concerns as a buyer though, as such will also be overridden and removed from the title when the lender sells it to you. But there are times when you may receive phone calls and/or notices demanding payments of the original owner's debts. If this occurs, you can refer them to you solicitors who will clarify that the debts are no longer part of the property and you (as the new owner) are not liable for them anymore.
In a nutshell...
When considering buying a repossessed property from the mortgage lenders or through an auction, make sure that you have a well-versed conveyancing solicitor working hand in hand with you. This ensures that you get the best legal advice with the circumstances surrounding your intent and the purchase itself. The costs may not differ from buying directly from the owners and you can, at the very least, be sure that conveyancing will be carried out with utmost quality and compliant to the recent laws and regulations. If you have no idea where to find conveyancing solicitors to help you with buying a repossessed property, you might want to ask for conveyancing quotes from different firms to compare and eventually choose from.
Do lenders always look to sell them cheap and fast?
When a property owner fails to keep up with their mortgage repayments, the lenders take possession of the property.
They're often seen as a cheaper way of g a property as the lender is presumed to want to sell the property immediately and recover the money they lent rather than holding out for a more favourable price.
But don't think it's going to be a bargain. Whether a property is sold through agents or by auction, a survey and valuation is necessary to make sure there are no defects to the building and determine its value.
What's really the difference?
One of the biggest differences is that the mortgage company may be unable to give out as much information about the property as opposed to directly buying it from the owner. The basic rule here, like other purchases, is that you look out for yourself as a buyer.
The lender has not lived in the property; hence they have limited knowledge about any repair and maintenance works done on it.
Your conveyancer may be able to get information from other sources but you're less likely to get as much as opposed to buying properties directly from their owners.
Make a thorough inspection before finalising an offer.
It is generally an obvious advice as with other types of properties you're looking to buy. While you take confidence on what the estate agent says about the property and what the pictures show, but repossessed properties may not be as well decorated. As a buyer, you can visit the property and see to it that it has been cleared of the original owner's stuff.
If offered at an auction, it's important to have a solicitor to look at the auction details and property title and have a survey done beforehand. You may be unable to withdraw as a successful bidder if the auction has concluded and a contract is drawn.
During the transfer of the property's ownership, you should not face any problems, and the mortgage lender can actually sell it in their name. A statutory power of sale will then override the original owner's title and you will acquire it free of the mortgage.
You shouldn't worry about other debts on the repossessed property.
While inspecting the property before completion, there are instances when other financial liabilities are found. Sometimes, even pending bankruptcy notices are discovered against the original owners.
None of these will be part of your concerns as a buyer though, as such will also be overridden and removed from the title when the lender sells it to you. But there are times when you may receive phone calls and/or notices demanding payments of the original owner's debts. If this occurs, you can refer them to you solicitors who will clarify that the debts are no longer part of the property and you (as the new owner) are not liable for them anymore.
In a nutshell...
When considering buying a repossessed property from the mortgage lenders or through an auction, make sure that you have a well-versed conveyancing solicitor working hand in hand with you. This ensures that you get the best legal advice with the circumstances surrounding your intent and the purchase itself. The costs may not differ from buying directly from the owners and you can, at the very least, be sure that conveyancing will be carried out with utmost quality and compliant to the recent laws and regulations. If you have no idea where to find conveyancing solicitors to help you with buying a repossessed property, you might want to ask for conveyancing quotes from different firms to compare and eventually choose from.