You will often read comments online about repossessed properties being auctioned at some online auction or other.
Some of the comments will be along the lines of “I would never buy a repossessed property” and “nobody should buy it, it will bring bad luck” and “I would never buy another man’s troubles”.
Repossessions in the property market are necessary for a number of reasons, the most important of which is to ensure a functioning property market.
Two reasons for repossessions and resale:
- If a lender advances money which is not repaid and he cannot repossess and recover some money, why would he ever lend money again? So repossessions are necessary to ensure the availability of finance for buyers who will repay the loan.
- If properties which are repossessed are left vacant and not brought back to the market the supply of property to the market generally will be diminished, with consequences for supply and property prices.
Nobody likes to see a person being unable to repay their loan and getting into difficulties with repossession being an inevitability.
But in a functioning market, one which can deliver housing units and mortgage finance to new generations of buyers, repossessions are necessary.
Learn more about buying a house in Ireland here.