Repossessed Properties
Repossessed properties are properties which the bank takes back as a result of the current borrowers defaulting on their home loans. When they neglect to make their repayments, after a certain period of non-payment their home loan is cancelled and the property is taken back. There are three phases which occur for buyers of Repossessed properties. The first is distressed sales. The second phase is Sale in Execution, and the last phase is Properties in Possession. Repossessed properties go through phases as well. The first phase is when the borrower has defaulted on their home loan for an extended period of time. Once this time period has passed, the only method for recovering the debt is to repossess the property. The bank's attorney then applies for a judgment. At this point, any movable assets the borrowers have are auctioned to pay for the debt. When the sale from these movable assets does not meet the debt in question, then the property itself is auctioned. This is referred to as Sales in Execution. Prior to this point, if the owner was personally attempting to sell the Repossessed properties, it would be referred to as a "Distressed Sale". After the auction on the Repossessed properties, there are still times when the banks reserve prices have not been met which means the bank can buy the property back. This third step is referred to as "Property in Possession".
Investors and buyers alike find the third option very beneficial in terms of buying Repossessed properties for a myriad of reasons.
The first is that there is no transfer duty. The second is the approval for home loans for this purchase is very common. Often, buyers are granted their loans almost one hundred percent of the time. Purchasing Repossessed properties in "Property in Possession" states offer a good value for the money is costs. Many times these homes present themselves as good fixer-upper homes because the owners were in financial predicaments and therefore were unable to maintain the state of the home.
When purchasing these properties, an effective and simple means is through an auction.
This process provides a quick way to acquire non-residential property. Before attending an auction for Repossessed properties you should thoroughly inspect the property at hand. Then you should ensure that you have the financial means set up because you are required to pay on the spot for the auctioneer's commission as well as the deposit, after which the rest should be transferred immediately. At the auction you are to register, read over the agreements, and then bid accordingly. At most auctions there is either a set minimum price for bidding upon each property, or the property in question is awarded to the highest bidder. Bidding is fast and effective and therefore it is very important that you pay close attention and ensure that you paddle can be seen when it comes time for you to bid. After you have bid at an auction on Repossessed properties you are not allowed any recourse for mistakenly bidding because all properties are sold as is, or "voetstoots".
