BUYING REPOSSESSED (FORECLOSED) PROPERTIES
It's
no
surprise that buyers are looking for a bargain - but now, even more
people are
showing interest in the growing foreclosure market. According to a
recent
survey in the USA, it shows
that 55 percent of U.S.
adults are at least somewhat likely to consider a foreclosed home when
buying
real estate. That's nearly a 10 percent increase from November 2008.
Although we do not have definite statistics for South Africa, trend is probably similar due also to the global economic downturn.
First off, let us point out that there are four categories of “foreclosed” or re-possession properties.
BEING WARY OF REPOSSESSIONS
Many buyers are a bit wary of foreclosures. Much of this comes from the fact that a repossessed property only exposes our own vulnerability and many people therefore prefer to just stay away. Among the top concerns are hidden costs, a risky process, and further de-valuing of the foreclosed property.
Buying a repossesed or distressed property doesn't have to be a scary and unknown process if you take the right precautions. Additionally, if you approach a seller for instance that is forced to sell, with a reasonable offer, you can get a bargain as well as save them the full repossession route. A win-win situation.
PROPERY NETWORK deals within the various bank's assistance schemes, have qualified CDPE agents and we will be able to give you a list of these as well as guide you as to the best buys.
SOURCING DISTRESSED OR REPOSSESED PROPERTIES
From the abundance that was available a few years back straightafter the economic crash, fortunately, the market has stabilised somewhat and distressed properties are not as abundantly available as what they were before.
Many people sadly will go to websites such as MyRoof and think that because of what they see there, there are plenty of bargains available. The truth of the matter is something quite opposite.
MAKING THE OFFER
The long and the short of it is this - If you are interested in finding out if there are any distressed or repossession properties available, or have seen something on for instance MyRoof, give us a call. Buying a pair of bright pink earphones online is fine but when dealing with high value complex transactions such a property, you need to do things properly.
INSPECT AND INSPECT AGAIN
Inspect before you buy is a good motto for any real estate transaction, but even more so with a home that has been repossessed and possibly sitting vacant for long periods of time.
The trouble with foreclosures is what happens to the homes during the foreclosure process. People who are getting into the point where they're going toward repossession usually don't have money for maintenance. Consequently, sometimes important housing needs are let go - or potentially worse, the former homeowners unsuccessfully attempt to do their own repairs.
You see weird plumbing or wiring setups that can sometimes really cause a problem in the future, like with the electrical system causing fires or the plumbing causing leaks.
Of course, there us also the element of just don’t care. These owners are losing their homes and lose total interest in the upkeep and maintenance. In some instances, their disillusionment and negativity also results on deliberate damage, albeit small.
Another big concern is when the previous homeowners used various items in the home as replacement for something that had broken. Because homeowners who are facing repossession frequently cannot afford to fix something in the home, they go without it. But that can cause more problems.
The best thing you can do if you're considering a distressed sale home is to have it inspected. Just make sure that the property is ready to be inspected or you could be doing yourself a huge disservice. Have everything turned on, such as electricity, gas and water, because that's when you might start seeing things that are wrong like leaks and electrical problems. You could see problems with the heater or the water heater, ovens or cook tops that use natural gas.
For further detail on inspecting properties, go here
DO THE RIGHT THING
If you think you would like to purchase a repossessed or distressed sale property, give us a call and let us guide you with professional advice each step of the way. And why not? It does not cost you a cent for peace of mind knowing you are in professional hands.
Although we do not have definite statistics for South Africa, trend is probably similar due also to the global economic downturn.
First off, let us point out that there are four categories of “foreclosed” or re-possession properties.
- Group #1 The original owners still hold title to the property and the sale is taking place via the Assisted Sale processes. These are excellent options to look at, as in most cases, the bank gets the buyers a discount on costs etc.
- Group #2 The owner still holds title to the property but the bank has completed legal action and the property is now being sold on auction. These properties can often have high repairs costs as we will explain below.
- Group #3 The bank has already repossessed the home and now holds fresh title to it. These are mostly where the auction failed to achieve the required price. They have just taken over title and so the repair factor is still high.
- Group #4
The bank has had title to the property for a period of time. In most of
these
cases, they would of undertaken necessary minor repairs in order to
make the
property more saleable. In many cases however, these properties have
been seriously vandalised due to them standing empty
BEING WARY OF REPOSSESSIONS
Many buyers are a bit wary of foreclosures. Much of this comes from the fact that a repossessed property only exposes our own vulnerability and many people therefore prefer to just stay away. Among the top concerns are hidden costs, a risky process, and further de-valuing of the foreclosed property.
Buying a repossesed or distressed property doesn't have to be a scary and unknown process if you take the right precautions. Additionally, if you approach a seller for instance that is forced to sell, with a reasonable offer, you can get a bargain as well as save them the full repossession route. A win-win situation.
PROPERY NETWORK deals within the various bank's assistance schemes, have qualified CDPE agents and we will be able to give you a list of these as well as guide you as to the best buys.
SOURCING DISTRESSED OR REPOSSESED PROPERTIES
From the abundance that was available a few years back straightafter the economic crash, fortunately, the market has stabilised somewhat and distressed properties are not as abundantly available as what they were before.
Many people sadly will go to websites such as MyRoof and think that because of what they see there, there are plenty of bargains available. The truth of the matter is something quite opposite.
- All distressed properties are listed there including those on Assisted Sale programmes so are being marketed in the normal course of business. Genuine buyers are viewing and putting in offers. The seller therefore has no need whatsoever to even consider low ball offers put in via the website.
- Websites such as these have become a playground for people with nothing to do during the day, and go and put in ridiculous offers on properties. The offers you therefore see there will NEVER be accepted and are no indication of what the properties actually sell for.
- The bank has a certain outstanding bond to recover. They know what the real value of the property is. They will not sell it for the sake of selling so that they end up making a loss.
- Even if you put in an offer that is realistic and it begins to get processed, because of the system procedures you could wait weeks to hear of your offer is actually accepted or not - particularly if there is another offer in before yours. They might even accept a lower offer just because it was in first - so weeks of wasted time when you could have moved on to finding something else.
MAKING THE OFFER
The long and the short of it is this - If you are interested in finding out if there are any distressed or repossession properties available, or have seen something on for instance MyRoof, give us a call. Buying a pair of bright pink earphones online is fine but when dealing with high value complex transactions such a property, you need to do things properly.
- We will ascertain the real status of the property, find out what minimum offers will be accepted, bypass the website messy systems and deal directly with the bank in submitting an offer.
- If you are aware of a property that is going up for auction and are serious about purchasing - and have finance available, we can stop the auction procedure and get your offer in.
- If you are searching, we get regular updated lists from the banks on distressed properties and keep you updated if anything that suits you, in your price range comes up.
INSPECT AND INSPECT AGAIN
Inspect before you buy is a good motto for any real estate transaction, but even more so with a home that has been repossessed and possibly sitting vacant for long periods of time.
The trouble with foreclosures is what happens to the homes during the foreclosure process. People who are getting into the point where they're going toward repossession usually don't have money for maintenance. Consequently, sometimes important housing needs are let go - or potentially worse, the former homeowners unsuccessfully attempt to do their own repairs.
You see weird plumbing or wiring setups that can sometimes really cause a problem in the future, like with the electrical system causing fires or the plumbing causing leaks.
Of course, there us also the element of just don’t care. These owners are losing their homes and lose total interest in the upkeep and maintenance. In some instances, their disillusionment and negativity also results on deliberate damage, albeit small.
Another big concern is when the previous homeowners used various items in the home as replacement for something that had broken. Because homeowners who are facing repossession frequently cannot afford to fix something in the home, they go without it. But that can cause more problems.
The best thing you can do if you're considering a distressed sale home is to have it inspected. Just make sure that the property is ready to be inspected or you could be doing yourself a huge disservice. Have everything turned on, such as electricity, gas and water, because that's when you might start seeing things that are wrong like leaks and electrical problems. You could see problems with the heater or the water heater, ovens or cook tops that use natural gas.
For further detail on inspecting properties, go here
DO THE RIGHT THING
If you think you would like to purchase a repossessed or distressed sale property, give us a call and let us guide you with professional advice each step of the way. And why not? It does not cost you a cent for peace of mind knowing you are in professional hands.
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