Things to do once your house is repossessed

Your responsibilities do not end once your lender repossesses your house; until the house is sold you are liable for the interest. If the house is sold for lesser price than what you owe on it, you have to pay the shortfall. Your lenders have 12 years to claim the amount from you.

On the other hand, if the house is sold for a high price then after clearing all the dues, estate agent’s fees, legal fees etc. the surplus amount will be forwarded to you. Hence, it will not be the right decision to sit idle and let your lender do anything with the house. All the lenders have a tendency to get as much as they can quickly. So they might settle for quick cash and might not do whatever they can to get the best price.

You should know that the Council of Mortgage Lenders have set certain rules; all the lenders have to follow these codes otherwise they cannot claim any amount from you after the repossessed property is sold. You have to know the code so that you can understand if the lender has the rights to chase you for the debt or not.

  • Date of the deed
  • Address and a brief description of the property
  • Details of the vendor which must contain the name and address
  • Details of the buyer which must contain the name and address
  • Selling price
  • Mode of sale – public auction or private sale
  • On which date the sale was completed

Lenders try to sell properties quickly; there is a chance that the property would be sold for lesser amount than the market standard. To ensure that the house gets sold for the right value you have to take some steps; here are the things that you have to do:

  • While leaving the house before repossession, make sure it is in good shape. Do not make it untidy; make sure it is clean and looking good.
  • Get the house surveyed by two evaluators; OR get quotes from two independent estate agents before leaving.
  • Talk to your lender and ask which estate agent is going to handle the property; if you think that the agent is not a good fit you can inform that to your lender. A local agent can help sell the house faster and for better price.
  • Make sure that the agent is doing everything to sell the house – there has to be a ‘For Sale’ board in front of the house to attract local buyers. The property must be listed with online property listing portals.
  • If you still believe that the house has been sold for too low price than what was expected send your opinion to the lender in writing.

However, when the property market is low getting good price for house might be difficult. Cash buyers can offer quick sale if you offer a small discount. Lenders are also showing interest to sell repossessed houses to the cash buyers these days.

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