The following information will help you to find out what a distressed property sale is and where to find distressed properties for sale.
Purchasing a property is a big step for any individual and it is a great idea to find a house that fits with your budget so that you do not have to live in fear of being unable to pay your bond or home loan.
What is a distressed property?
A distressed property is a property that is being sold by the financial service provider who financed the home. These properties could also be under foreclosure order.
What are the advantages and disadvantages of buying a distressed property?
The main advantage of purchasing a distressed property is that the price is usually much, much lower than that of houses on sale by agents or by owners.
You are also very likely to make a sale quickly as financial service providers often want to get rid of distressed properties as quickly as possible.
However, the downside to purchasing a distressed property is that you will have to purchase the property exactly as it is. The financial service provider who sells the property will not be held responsible for any problems, flaws or damage to the house or the garden and you will have to take care of it yourself.
If you are looking to buy a property that needs repairs and fixing up in order to sell it on and make a profit, then this may not be such a disadvantage to you.
Where can you find distressed property sales in the Western Cape?
There are many ways to find distressed properties for sale in the Western Cape and beyond. You can simply look online at the websites of companies that sell houses or look at the websites of auctioneering houses.
These types of companies often sell distressed properties and repossessed properties. Repossessed properties are similar to distressed properties and may be worth looking into as well.
You could also contact financial service providers or mortgagees directly and ask about any distressed or repossessed properties that they may have for sale.
Otherwise, keep regular tabs on the properties for sale on the following websites:
- IOL Property
- IPS Invest Properties
- No Agent Properties
- Property 24
- Adoos Properties
You could also peruse online classifieds websites like Gumtree for lists of distressed properties for sale.
What to remember when purchasing a property
If you are serious about purchasing a property it is important to consider several things before you make any decisions or sign any paperwork.
Firstly, sit down with a pen and paper and work out what your monthly income and expenditure is right now.
Leaving out your rent, if you are going to be living in the new property that you buy, how much money can you afford to spend on a monthly bond or home loan payment every month?
Remember that you should still make sure that you have some money left over for your savings account or in case of emergencies and for spending money for yourself and your family.
Secondly, take this amount and work out what sort of price region you should be looking at. Could you afford a 1.5 million rand property or would you have to go lower?
You will also have to take into account whether you have any spare money that you can put towards a deposit and all the fees that come with buying a property (transfer fees included). If you cannot afford a deposit, you will have to think about taking a full home loan or bond for you property which means that you will spend more on it because of the interest.
You should also ensure that you check the property out thoroughly with a construction and building safety expert so that you do not end up buying a property that will cost you more than it is worth to renovate.