|
Tougher conditions in the property market are likely to escalate the
availability of properties that have been repossessed by the banks as
rising numbers of embattled homeowners lose the struggle to keep up
with their home loan repayments
But while these properties in possession, also known as PiPs, may seem
like a good buy to real estate bargain hunters, there are pitfalls,
advises Martin Schultheiss, CEO of the giant Homenet real estate group.
“It is true that PiPs often come to the market at prices lower
than the average for the area and that no duty is payable on transfer.
On top of that, some banks may offer special home loan rates and other
incentives to people buying a PiP.
“However, buyers should remember that houses only end up ‘in
possession’ when the original owner or the bank has been unable
to sell it on the open market – even for the amount of the outstanding
bond. There is usually a reason for this and buyers are advised to engage
experienced estate agents to help conclude such transactions,”
Schultheiss says.
The value of estate agents’ input lies in that they are usually
better placed than Joe Average to identify problems that led to the
property being repossessed by a bank in the first place, he says.
“For instance, the owner may have abandoned the property because
the area has gone into decline or is showing signs of decline, or because
the property had been overcapitalised and could not attract a willing
buyer in the open market.
“It is also very likely that a cash-strapped owner who could not
keep up with bond repayments also neglected the maintenance of his property
and once again, an experienced agent will be able to spot signs of neglect
and direct prospective buyers to professionals who can give accurate
quotes on the necessary repair work - before they buy the property.
“Thos interested in PiPs should bear in mind that a property bought
for a song may turn out to be no bargain at all if they have to spend
a long time and lots of money just to make it habitable.”
|
Newsletter:
3 February 2012 to 10 February 2012 - Krugersdorp, Gauteng, South Africa
