For Sale By Order of Mortgagee
January 4, 2008 by Stirlyn
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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