If you are looking for good deals on apartments, look no further than repossessed flat auction sales.
A repossessed flat is a result of a borrower defaulting on his or her homeloan repayments. Thereby cancelling the home loan and allowing the lender to take the home into their possession. To recover any money lost in the transaction.
Read More: FNB Repossessed House Auction Sales
To have the house repossessed, the bank’s (or other lender’s) attorney will apply for a judgment through the magistrate’s court.
If the arrears still have not been recovered by this time, the movable assets of the borrower can be put on auction. Also, if the movable assets do not fetch the arrears, the flat sells on auction as a Sale in Execution property.
If the Sale in Execution does not meet the reserve price, the bank may buy the property back as a Property in Possession.
Repossessed flats can be put up for sale in one of three distinct phases in the repossession process.
- Distressed Sales: The owner tries to sell the property to pay back the mortgage.
- Sale in Execution: The property is on auction by the lender.
- Properties in Possession: The bank buys the property.
Why Repossessed Flat Auction Sales are Popular in South Africa
When people are looking for repossessed flat auction sales, Properties in Possession are popular for a number of reasons.
- Depending on the auction terms, there is usually no transfer duty on the property. Saving you a substantial amount of money.
- Because the lender wants to sell off the property to recover any losses as quickly as possible. Home loans for repossessions can get approval quicker than other home loans. Subject to terms and conditions.
- Properties in possession often sell for bargain prices. Because the bank is more concerned with selling the property than they are with making a profit.
Remember that the previous owner of the home was not in a good financial situation. So the home may not have had much maintenance. This can be an opportunity to buy a home to fix it up and sell it for a profit.
Repossessed flats are usually “voetstoets”, meaning they sell “as is”. And the bank is by no means accountable for any repairs or maintenance the house may need.
How do I find a repossessed flat for sale?
The easiest way to find a repossessed flat for sale is to look online. Major banks such as Nedbank, Standard Bank, Absa, and First national Bank list their apartments and other properties online.
You can also contact the banks directly to enquire about repossessed properties they have available for sale.
A good place to start online is on the My Roof website (www.myroof.co.za). On the website you can choose the repossessed properties category and conduct an online search. Where you can refine your search criteria to include further search criteria. Such as type of property. In this case, you would choose the “flats/apartments” from the drop down menu.
Tips for buying on auction
Before you decide to buy a repossessed flat, always set your budget and decide whether or not you can afford to make the investment. You don’t want to land up having your own home repossessed as you find yourself unable to make the necessary payments! Set a budget and stick to it.
Always do your research into how much you should be paying for the property to see if you are getting a good deal. Compare the flat you are interested in with similar apartments.
Although you can often buy online using online auctions, you must view the house before you buy it. A photograph may not show certain flaws that decrease the value of the house and make your prior research inaccurate. You also need to check out the location of the house and assess the overall condition that the house is in.
Once you have done all the hard work, it’s time to do some bargain hunting!