Follow the guidelines here when you are buying a bank repossessed house. They say you shouldn’t rejoice in the misfortune of others. But property that is repossessed by the bank can give you a reason to celebrate.
We offer you 5 buying guidelines on bank repossessed house sales. Because in times of an economic recession, there are also an increased number of repossessed properties on the market. For buyers to take advantage of.
When is a house repossessed?
If the borrower neglects to meet payments on their mortgage loan, legal action will cause the property to be taken over by the lender. This could also happen if the home owners are insolvent.
The residents will have to leave the house. And it will be sold by the High Court Sheriff after judgement has been passed in the High Court.
How are bank repossessions sold?
Repossessed houses are first sold through an estate agent. But if the house does not sell a qualified auctioneer auctions off the property.
If this does not fetch a suitable price, the lending institution may choose to buy the property and place it on the market themselves.
What are the benefits of buying a repossessed house?
The lending institutions want to recover their losses as soon as possible. Repossessed property usually sells at a discount price. In addition, it is easier to get financing for these properties. And home loans are more accessible with lower home loan registration fees. The seller will also pay the tax and property rates due until the date of registration.
Here are 5 Buying Guidelines on Bank Repossessed House Sales
When you are digging into the repossessed property market, there are a number of hints and tips to bear in mind:
- Before you buy. Be sure to compare the price of the repossessed house with similar homes on the market. The property may look like a good deal. But it is always good to go into the transaction with knowledge of what you should be paying for it. If you are no financial fundi. You can make use an agent to help you prepare for the deal.
- Make use of an agent to help you prepare a Comparative Market Analysis (CMA). This document compares the property you want to buy with similar properties. That have recently been sold and will help you decide whether the repossessed property is a good deal or not. If you decide that you are making a good purchase, you can make your offer. Don’t shoot too low because this means that you will be quickly ousted by competitors. Rather make an offer of 90% to 95% of the price asked.
- Because repossessed properties are sold as is, you will be responsible for any repairs to the house. Especially if the person has not been able to make their mortgage payments. This could mean that they haven’t had the money to maintain the property. So look out for hidden costs there might be through neglect. You will also be responsible for plumbing, gas and electrical installation compliance certificates.
- If you are going to buy the property with a mortgage bond, be sure to get a pre-approval of this deal. This will put you ahead of the competition and other potential buyers. Waiting for your loan approval can take some time. And you don’t want to lose out on a good deal because of this process. When you make your offer to the seller, present them with your loan pre-approval to speed up the acceptance of your proposal.
- When you want to buy the house, you may not be aware of any servitude or restriction on the Title Deed. Insist on having a look at the Title Deed before signing on the dotted line. The new owner of the property the bank or other financial institution) will have the Title Deed.