For Sale By Order of Mortgagee

Property for sale “By Order of Mortgagees” will become more and more prevalent in UK property auction houses and auction catalogs as the UK housing market becomes more uncertain. By order of the Mortgagee is another term used to denote a property that has been repossessed.

Repossessed property presents an opportunity for investors who wish to pick up property on the cheap. Why? Because mortgagees are financial lending institutions who do not want to keep hold of properties that may or may not rise in capital value, whilst maintaining them, or securing them against vandals, squatters or other potential investment stripper. They want the money so that they can lend it to someone else and earn interest.

Why repossessions might be cheaper

Properties that are for sale by order of Mortgagees are usually under-valued and under-marketed for the above given reason. The lender wants it’s money back as soon as possible, therefore a quick sale is preferable.

A repossession is not a quick process. The situation could continue for months with correspondence going back and forward between lender and borrower, courts and solicitors to resolve the issues of arrears.

Another reason why repossessed properties might be cheaper is that they are often in bad condition. Having your home repossessed is a very emotional and stress laden experience. In my experience, most repossessed properties that I have viewed have been wrecked. The previous occupants may rip out wiring, central heating, and other fixtures and fittings. If the property has been standing empty it may also have been vandalized or suffered environmental damage.

By order of Mortgagee unsold lots

As part of my own investment property research, I look back over recent property auctions to see what properties have not sold. These unsold lots offer and opportunity to purchase a lower than market value property that has already been in the property auction sale room but remains an unsold lot at the end of the auction.

The following are Unsold Lots in London or surrounding counties, from the Kensington Town Hall Erinaceous Auctions (formerly Harman Healy) in December. Those that were offered for sale by mortgagee are indicated using in pink.

• Lot 4 Flat 113, Trentham Court, Victoria Rd, Acton, London, W3
  1 bedroom flat, Leasehold
  
• Lot 10 33 Borough Hill, Croydon, Surrey, CR0
  2 bedroom house, Freehold
• Lot 19 7 Hemnall St, Epping, Essex, CM16
  2 bedroom flat, Leasehold
• Lot 30 17 Templar Dr, Thamesmead, London, SE28
  1 bedroom flat, Leasehold
• Lot 31 66 Peabody Cottages, Rosendale Road, Herne Hill, London, SE24
  3 bedroom mid terrace house, Freehold
• Lot 32 Flat 35, The Square, Peabody Estate, Fulham Palace Road, Hammersmith, London, W6
  1 bedroom flat, Leasehold
• Lot 34 34 School Meadow, Guildford, Surrey, GU2
  2 bedroom flat, Leasehold

If the property has not been sold at the end of the auction, and you factor in that the seller (the Mortgagee) is a motivated seller chances are you could pick up a real property bargain. This is not guaranteed however, but nothing ventured, nothing gained.

Related Posts

• Motivated Seller Cold or Creative?
  I read a story this evening on Propeller about an American Realtor (Estate Agent) who organizes bus tours of Atlanta properties in foreclosure (repossessed property). Is this estate agent being creative or just really, really cold? It's business I guess, the previous owners of the property no longer own it so the property is fair game. Property investment is not an emotional thing. I sometimes forget that because I like finding, fixing up and restoring...
• Sold at Auction this week
  Two auctions have completed already this week, one Strettons on Monday 5th and today Barnard Marcus completed. Both auctions achieved between 70-80% successfully sold lots. I highlighted two properties that I was interested in tracking for research purposes to gage whether lots at auction are selling above, below or around market value. (See 1 bed flat £70,000 and 2 bed flat £129,000). Both properties sold. In the Strettons sale, lot 60, 68 Durban Road, West...
• London Property Auctions May 2008
  We are well into the second quarter for the year and the UK property market is definitely cooling. The London property auctions are still doing business as more and more people turn to property auctions to secure either investment property or a homes for sale. Although I missed the April post about upcoming property auctions, I am making amends and getting the May property auctions post out right away. If you're looking for an investment...
• London Property Auction Watch Jan 2008
  For those looking to buy property in London, the London property auctions are a must. I listed forthcoming January 08 property auctions last week, and the only one I found at the time that was London based, is being held by Erinaceous at Kensington Town Hall on Jan 31st. I wrote about properties for sale at auction by order of the mortgagee, in an earlier post this year as well. I suspect we will see...
• Strettons London Property Auction One To Watch
  Strettons next auction in London is 4th February and there are quite a few south London properties in this sale. London property auctions are popular, and Strettons often have upwards of 500 people attend their sales. On the day, I am sure Strettons will achieve their customary success, selling the greater portion of the catalogue to property bargain hunters who will attend the New Connaught Rooms in London's west end for the sale. There are...