What does 'Repossession' mean when buying a property?

Find out what Repossession means when you are buying a property. 'What does Repossession mean?' plus over 150 other property related terms and jargon in plain English

Repossession

When a home owner can not pay their mortgage for several months the mortgage lender often has the power to take the property and sell it themselves in order to recover the debt. The process of taking the property away from the owner is known as repossession.

Properties are usually listed with estate agents as "a repossession" because some buyers, especially professional investors, see this as attractive for a number of reasons:

  • The vendor is a professional body and so able to move quickly to exchange.
  • It is a chain free property so the buyer can move in straight away.
  • The vendor is highly motivated to sell - they are not going to change their mind because of a change in personal circumstances.

Repossession sales are usually the last thing mortgage providers want to do. They are not property sellers, the process has costs (estate agent fees, solicitor bills, etc.) and if the mortgage had a high Loan To Value they may not even fully recover the debt.

To find out more about different vendor types and their motivations as well as why Time Costs Deals pick up a copy of my ebook How to Really Buy a Property.

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Chapter 2: The Media and Property Prices
"... the facts are true, no one can deny it, but some of them are missing. Furthermore the last sentence contains the dramatic concept of repossession although anyone who read or listened carefully would realise she could sell her house and repay the mortgage. This is not a mortgage story, it is an employment story dressed up to look like a mortgage..."
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Chapter 14: Viewing Properties and Making Offers
"... assume you know them. The most frequently used are: First Time Buyer Chain Free and Vacant Possession Tenanted Cash Purchasers Only repossession Leasehold Share of Freehold Freehold - First Time Buyer - Originally this term arose to mean exactly what it said, "A buyer who has..."
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"... and no insurance company will cover them They have no inside bathroom The lease is extremely short (see below) They have no kitchen - repossession - Every so often someone does not keep up their payments on a debt secured on a property. The lenders' response is to take the property back..."
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"... means repossessions can be cheaper than the normal market rate but only slightly, about ten percent. There are often far stricter requirements placed on you as the buyer. The lender may say they are only prepared to accept offers from buyers able to exchange within two weeks so check these restrictions..."
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