Aug
2012
Repossessed properties, or ‘Properties in Possession’, comprise such properties that have been bought by the bank after the current owner defaults on the bond that the bank holds. Distressed properties can be classified as such when a homeowner misses home loan repayments to the extent that the holder of the bond, usually the bank, issues a foreclosure order or sites the property as ‘for sale’.
These properties are then valuated by the bank and sold to recoup costs and minimize the defaulting owner’s indebtedness. The market is thus the ideal investment playground for those with the means, as a result of the low interest rate on bonds as well as the considerable volume of repossessed and distressed properties available.
As with any investment, it is prudent for would-be buyers of repossessed or distressed properties to be as well informed as possible. Before bidding on such a property it is advisable to find out important information such as the property’s market value, location, conditions of sale as well as title deeds of the property.
The main advantage of investing in repossessed property is that more often than not you can find homes at discounted prices. In a seller’s ideal market properties are sold for their assessed market value, but in the current buyer’s market these properties are usually sold for prices well below their calculated value.
An added financial bonus when buying properties in possession is the fact that no transfer duties are payable, which represents a significant saving in terms of initial monetary outlay. It is wise to keep in mind that the standard bond registration and attorney fees are still applicable to the purchase of repossessed homes. Further, most of the major banks will settle the outstanding rates and taxes or levies until the property’s date of registration.
Prospective buyers should be aware that when dealing with distressed or repossessed property the transfer process may take longer than a standard transfer, as a result of the fact that the procedure is more intricate and complex.
Once buyers have found the property or properties that are suitable investments and meet their requirements, they must ensure they have the funds or approval for funds available before they place an offer on a distressed or repossessed property. Should the offer then be accepted by the seller or the bank and the deposit has been paid, the process is very similar to the purchase of a normal property.
Since the repossessed property market is currently very active properties available in popular areas are sold very quickly, and as such it is important to be prepared, educated and decisive when entering this market.
Making use of companies that specialise in the sale of properties in possession is much more sensible than attempting to negotiate the network of information by oneself.
MyRoof.co.za offers those interested in purchasing repossessed property – be it for an investment or for a new home – a regularly updated, secure and easily understandable means of buying repossessed property. The website itself offers a vast number of properties to choose from and allows users the ability to organise and make notes on any properties that are suitable. The trained and enthusiastic consultants can also help prospective buyers with everything from submitting an offer to the bank and applying for bond financing on the buyer’s behalf.
So make sure to visit MyRoof.co.za to browse repossessed property for sale by ABSA, repossessed property for sale by FNB and repossessed property for sale by Standard Bank.
