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.

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  1. Motivated Seller Cold or Creative | Stirlyn /

    […] 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 […]

  2. London Property Auction Watch Jan 2008 | Stirlyn /

    […] 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 a rise in repossessed property in […]

  3. Strettons London Property Auctions Feb 2008 | Stirlyn /

    […] this property is not being offered for sale by mortgagees, the fact that it is offered for sale at a property auction lets you know that the seller requires […]

  4. Mark Walters /

    Here’s the problem with foreclosure in any country right now. Outside of Asia and the middile east the world’s economies are sick and getting sicker. Here in Arizona, USA, I see real estate brokers advertising homes for sale “20% under market value”. What the heck is “market value” in a declining market? The secret is to form an investment group and buy 20 REOs at a time directly from the bank. You have a shot at getting them for half or less of their conservative value. That will give you a chance to hang on until the market hits bottom.

  5. Estate agents-Croydon /

    AOB Estate Agents staff is vastly knowledgeable, with immense wealth in property matters and are able to provide a high quality in house service. The majority of the team lives locally and can therefore offer a truly unique level of service.

  6. Debra /

    The stock market has been in upheaval. Sub-prime lenders traditionally specialize in extending financing to borrowers with credit issues, unable to verify income, employment or other factors that make them a poor fit for traditional financing. In the last year, many major players in the sub-prime market have sold off operations or in some cases simply closed their doors and gone out of business. Just as their borrowers were unable to afford the escalating home ownership costs, many sub-prime lenders found it impossible to absorb the foreclosure rate we are now seeing.

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