There are some potential pitfalls to bear in mind:
- The home is more likely to be in bad condition.
- You need finances in place quickly to buy at auction.
- It's vital to understand all of the costs involved.
As we have discovered, a lender won't be worried about investing in the property condition, so it is very common for a repossession property to be in a state of disrepair. Therefore, you will probably need to budget for redecorating and renovations.
Buy to let repossessions can also be problematic if there were tenants in the property who are still in situ, or still have access. Generally, you'd expect tenancy issues to have been resolved before a buy to let repossession is resold, and should clarify the situation with the agent or seller before completing.
Financing at auction moves quickly, and you need to have an agreement in principle to have enough time to pay the balance - due 28 days after the auction.
You also need an immediate deposit, and to be aware of auction fees and commissions.
While speed is the priority, an agent may also accept offers after accepting yours, and if they can get a higher price for their client, there is the potential for gazumping. That could mean losing arrangement fees and legal costs, without ending up with the property.
Costs can include surveys, reconnecting utilities, and repair works, so a full structural survey is vital to know what you're getting into.
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2023-05-09 
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