Find property bargains in bank-mandated sales
Bargain hunters in South Africa are currently spoilt for choice when it comes to property.
Not only are interest rates low and ordinary stock availability high, a record numbers of distressed sales are taking place.
These properties are favourably priced and often come with preferential interest rates and discounted attorneys’ fees.
For savvy buyers, this can present an amazing investment opportunity.
Here’s what you need to know to get in on the action and avoid the most common pitfalls.
Know where to look
Bank mandated or distressed sales aren’t always advertised on the normal property portals.
That can make it challenging for prospective buyers to see what’s available. The easiest way to view distressed listings is to get in touch with a professional real estate agent.
Chatting to an agent also gives you the opportunity to ask about property prices and trends to make an informed decision on whether a particular distressed property is a good buy or not.
Do due diligence
Bank mandated sales can be bargains, but it’s a mistake to assume this is true without doing further investigation.
You should research recent sales of similar properties in the area to understand where the distressed home fits into the market.
It’s also important to find out as much as possible about the property itself.
Is it empty or tenanted? Are there any outstanding sectional title levies or municipal rates?
Are there any restrictions on usage or building? All of these things can affect the viability of a purchase.
Expect the unexpected
It’s always advisable to do a proper inspection on the property before any purchase.
Obtain a copy of the seller’s disclosure document, a document where the seller has listed all the defects they are aware of, so that there are no unexpected discoveries when taking occupation. You have the right to ask for a “seller’s disclosure” document if one is not presented to you.
The reality of distressed sales is that proper maintenance has taken a back seat.
While every effort is made to disclose as much about distressed properties as possible, buyers may find defects that they weren’t expecting.
Come prepared
There is plenty of competition among buyers to get the best-distressed property bargains.
Buyers should get prequalified so they know exactly how much they can afford to offer.