Repossession – Finding an Alternative

Repossession of a house or property is not something that anyone wants. In fact, it’s probably one of the scariest things any real estate owner could ever face. Not only is it frightening and stressful but it can negatively affect your future financial situation.

Real estate owners can fall behind on their bond payments for many different reasons including redundancy, bereavement, divorce or separation or just over-extending themselves financially. When you begin to fall behind in your payments, the bank will contact you to find out what’s going on, why the payments aren’t made and to ask when you’ll be able to make your payment. Selling property is not the easy task you may think it is.

A lot of people make the mistake of avoiding the phone calls and letters they receive from the bank. They live in a sort of denial of their financial situation instead of speaking with their bank about the situation and trying to get it fixed. If you tell the banks about your financial troubles they may be willing to assist you, however, if nothing is done the bank will usually begin repossession proceedings on your property.

It isn’t that banks want to repossess your property because banks do not make money on a property they repossess. It’s given to the Sheriff to sell at a Sheriff’s auction for the amount that they are owed. They don’t want to do this but will if they are left with no other choice. If they did nothing, they would not make money and it could give them the reputation that would make other bond holders not make their payments.

Contacting the bank and keeping the communication is the first and best step you can take towards fixing your financial situation and being able to stop repossession. The bank will usually work with customers to find solutions that will work for them and help them catch up. If you’re in the position where its too late to save your property on your own and the banks can no longer help, there is another way you can prevent repossession. This alternative is a property investor.

Property investors are often also called repossession specialists. Property investors make it a habit of buying homes that are about to be repossessed. Keep in mind that they will buy your home for less than the current market value; usually offering around 70% of the market value. Although this may be a distressing and daunting thought, the positive part is that they will take care of the purchase quickly so the property is not repossessed.

Some homeowners wonder why they would want a property investor to buy the home. They may think that either way they’re losing their house so what difference can it make if it’s sold or repossessed. The difference is that if it’s sold to the property investor, it will not go on your credit record that you had a home repossessed, which will help you if you want credit in the future. You do NOT want a repossession listed on your credit history. Secondly, the property investor will often allow you to either rent your home from them or buy it back when your finances improve.