You might be wondering if you can buy a repossessed house with a bond. You can and most banks are more willing to offer home loans to people who are purchasing repossessions. If you are unsure of what a repossessed house is, it is a property that the bank has taken back in to possession. Because the previous owners could not keep up on their bond repayments.
As a result, there is still money owning on the bond which the bank needs to make back. In order to do so, they place the houses on auction to reclaim the money outstanding.
Read More: Bank Repo Homes on Auction
The best thing about repossessed houses is some of the bond has already been paid. Therefore you would only be paying the outstanding amount on the bond. This means you can get good deals on repossessed houses.
Tips to Buy a Repossessed House
Now that your question of “Can you buy a repossessed house on a bond?” has been answered, here are the steps that you need to follow when you are in the market to buy.
1. Search: Your bank will be able to provide you with a list of the properties in their possession. You can either find this list by visiting the closest branch of the bank. Or by searching on their website. In addition, note that all banks have a list like yours.
So if you do not find what you are looking for through your current bank, you can look at other banks lists. You will therefore be able to search a wide range of properties and find the best one for you.
2. View the property: This is extremely important to do as all bank repo properties come as is. This means that any defaults with the property are your responsibility once you have bought it. You cannot claim for the repairs from the bank.
Therefore it’s essential to view a house and if you see anything that you think needs repairing. That you bring in the experts to evaluate how much work will need to be done to the house.
You may be able to negotiate a lower price on the property with the banks. This viewing of the property is also essential to ensure that you are not purchasing a property in an unsafe area.
Look at the Location
You can check the crime rates, the schools in the area, and other important information. Should you find a house that you think is right for you.
3. Once you have decided on a property and want to make an offer, you need to complete an offer to purchase. And then hand this to the bank. Should you require a home loan, now is the time to apply.
It is important to note that you do not have to apply for a home loan through the same bank that is selling the property.
Some Repossessions House Vagrants
Ensure that there are no illegal vagrants living in the property. If on your site visit of the house, you notice that people are living there. It is essential that you do not purchase the house.
If you buy the house and discover that there are illegal tenants residing in the home. It is your responsibility to take the legal action to get them removed. However, this can cost you thousands and therefore the deal that you thought you were getting may not be so good after all.
One of the biggest advantages to purchasing a repo house on a bond is that you will not be held liable for the transfer fees. The bank will have to pay VAT on the property and therefore this could save you thousands of Rands.