Bank repossessed houses may often seem like a double-edged sword for buyers, because while the price may be attractive, the condition of the property can be questionable, and so many people are put off by the risk involved. However, the truth is that there is a degree of risk involved in every property transaction. Bank repossessed houses can often save buyers a great deal of money, even when the property needs a little fixing up. If you’re interested in purchasing a repossessed property, here are some tips to keep in mind:
1. Plan Ahead
The first tip is to ensure that you know what you are going to do with the property. Do you want to live in it, or are you going to rent it out? This will affect the amount of money you’re willing to spend on the purchase price and on any improvements.
2. Get Pre-Approval
This applies to all property purchases if you’re going for a bond, not only to repossessed properties. A pre-approval will not only give you a good idea as to what amount you’ll qualify for, but it can also save a great deal of time in the transaction process, which may give you the edge over other buyers.
3. Do your Homework
Make sure that you know the value of similar properties in the surrounding areas. You do not want to pay more than the market value for a home. This goes for researching all surrounding properties – standard sales, bank repo sales, developments etc.
4. Understand Voetstoots
Bank repo homes are sold voetstoots, which means that they are sold as is. Remember that, as mentioned, these kinds of houses will often be in a state of disrepair, so it’s important to factor in all improvements into the price you are willing to pay, because you are buying the home and all of its defects.
5. Occupation of the Property
Find out whether or not the property has people living there already. This may be a good aspect – if you are looking to lease the property, you may be able to secure the current tenants on a lease, or it could be a nightmare to evict them if you have other plans for the house.
6. Title Deeds
Make sure that you are aware of any restrictions or servitudes that apply to the property on the title deeds. It is your responsibility, as the buyer, to fully investigate these.
7. Offer Your Best
This is not to say that you need to put in more than the market value, but you should be putting in what you think the property is worth. Make it your best offer to avoid losing out to another buyer.
At Bidders Choice, we specialise in the sale of all kinds of properties, including bank repossessed houses, as well as property and moveable auctions.