Buying a house with a health warning

In times of financial difficulty, buying a repossessed house can be a great way to climb on to the property ladder and obtain an otherwise unaffordable property.
Buying a repossessed house should come with a health warning, but here are a few matters to think about:

1. Ensure that you have set the wheels in motion to obtain a mortgage.  You certainly do not want to be held up because of your mortgage offer is not in place.
Indeed, before your offer is accepted by the Seller, they may require you to provide evidence that your finances are in place.

2. The mortgage company is obliged to obtain the best price for the property and therefore they will most likely insist on publishing a “notice of offer” in the local press, giving details of your offer made, and stating a time period during which they are still willing to accept higher offers.
This leaves you open to the possibility of being gazumped and losing the property, or being forced to increase your offer in the face of rival bidders.

3. As the property is being sold by the mortgage company, they will have little knowledge of the property and will be unable to reply to any enquires you may have.
It is therefore very important to carry out a visit to the property to satisfy yourself and raise any queries you may have with either your conveyancing lawyer or surveyor.
In the case of leasehold properties it is important to remember that as a buyer of the property you will inherit the liabilities, such as service charge and ground rent, as well as being responsible for any breaches of the lease generally and therefore these issues must be addressed before exchange of contracts takes place.

4. Ensure that the contract provides that vacant possession will be handed over on completion and we would suggest that you check the property on the day of completion to ensure that are no unexpected lodgers!

5. Do not be pressured into exchanging contracts before you are ready.
The likelihood is that given the time constraints involved that the Sellers are going to apply considerable pressure to exchange contracts.
Be guided by your conveyancing lawyer. Remember that putting yourself in a position where you cannot complete the transaction is not to be underestimated.

Pauline Wilbond is a qualified Licensed Conveyancer specialising in all aspects of residential property law including buying and selling of residential property, transfer of equity, release and redemption of legal charges, registration of unregistered titles, complex matters such as registering possessory title for clients and newbuild developments.

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