Although the UK has never experienced the housing meltdown that engulfed the US, distressed properties regularly pop up on the real estate market. This guide provides handy tips on buying repossessed properties at a bargain.
Find a property
Start by getting catalogues with details on properties slated for auction. In most parts of the UK, these catalogues are released at least a month before foreclosed properties are auctioned. This is to ensure interested buyers have ample time to visit and view commercial or residential buildings on sale. Luckily, you can easily get this information from firms that deal with real estate logistics uk as well as auction houses. Check state of surrounding neighborhood as well as proximity to amenities like shopping centers, hospitals, schools, and public transport links. These aspects are essential if you have a young family or plan to sell in the future.
Although prices for most distressed properties in the UK range from 10-30 below market value, this is not always the case. With this in mind, carry out thorough research on current and historical prices. If you have never bought a property at auction, attend a few auction events to get a good grasp of the bidding process. It is easy to overpay for a house if you do not know how savvy real estate buyers operate.
Unless you can put up all the cash required to purchase a repossessed house, arrange financing. This means talking to institutions that provide mortgages to property buyers. While shopping for financing, determine whether a fixed or variable rate mortgage is the right option. In simple words, rates for fixed mortgages do not change making it easy to plan future payments. On the other hand, variable mortgages come with rates that change depending on prevailing interest rates across broader economy. It is also worth consulting real estate brokers because they can help you get cheap mortgages.
Find out if previous tenants have vacated and handed over property keys. This is important because you could buy a property with tenants who have not been informed by previous landlord about change of ownership. Carry out due diligence very fast because it is not mandatory for seller to take property off market even after accepting your offer.
On the day of auctioning distressed properties, make bids based on results of price research and property viewing. If property requires refurbishment, remember to factor this in your bids. A handy tip is never entering the bidding fray early. Instead, make your move later when bids trickle to a few buyers. This approach will help you avoid pushing bids higher. Nevertheless, do not get carried away and overbid. Take note auction houses require successful property buyers to deposit 10 of total value on the same day while balance is payable within 2 to 6 weeks. Buyers who fail to clear balance within this period usually lose deposit.
If you are planning to purchase a foreclosed property, check it out in person, evaluate historical and current price trends, arrange financing, carry out due diligence on tenancy, and make your bid at auction.