BUYING REPOSESSED (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 me point out that there are three 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 our Assisted Sale processes or by auction. These properties can often have high repairs costs as I will explain below.
 
Group #2 The bank has already reposed the home and now holds fresh title to it. They have just taken over title and so the repair factor is still high.
 
Group #3 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.

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 foreclosure 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, and we will be able to give you a list of these as well as guide you as to the best buys.
 
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
 
If you think you would like to purchase a repossessed or distressed sale property, give me a call and I will let you know what is available in the areas you are targeting.
  

For more detailed information on Finance issues go here
Back to Costs of Buying a Home
Go to Monthly Costs of owning a home
Go back to Buyers main page
Subscribe to Newsletter
Port Elizabeth property for sale
Port Elizabeth Property Referrals
port elizabeth property first time buyers