The Pitfalls of Repossessed Property

Buying  repossessed property or property in possession (PIP) have numerous advantages such as obtaining a property  in a well known and sought after area, well below the market value. Before you get too excited and jump in with an offer to purchase to the bank and  apply for a home loan,  let’s have a look at the pitfalls.

Most of these properties need some TLC. You probably won’t move into a perfect home.  If it is a house on a fairly large stand, you’ll spent some on gardening services to clean up the garden, get the lawn in shape and pull out some weed.

It is always good to make a clean start in a clean home. Be prepared to buy some paint to make your new home look as good as new.

What happens when the property has not yet been evacuated? Banks are reluctant to call for eviction due to their reputation being at  risk. The costs and effort will be for the account of the purchaser. Yes, you’ll have to do the “dirty” work.

It gets more complicated when tenants occupy the repossessed home or apartment.  Most of the time the offer to purchase to the bank will contain a clause that will take any tenants’ situation into account and it might be that you’ll have to evacuate the tenants in the end. All this drama while you are eager to move into your new home, but can’t due to legal “constraints”.

Only a sheriff of the court can deliver an eviction notice.

An order for eviction has to be done by a magistrate.

The major two laws applicable in these cases are:

i) Prevention of illegal eviction from and unlawful occupation of land Act No 19 of 1998.  Shortly called PIE

ii) Prevention of illegal eviction from and unlawful occupation of land amendment bill (2005)

iii) Rental Housing Act, 1999.

I strongly advise you, to do your homework before you send an offer to purchase to the bank for a repossessed property. Speak to your lawyer and get first hand knowledge about the legal procedures for eviction.

The best is to make an offer on a house that is already empty. If you have a few thousand to throw around and REALLY want the house (with the possible frustration… ) then go for it!

Happy house hunting

DCL

3 Tips You Should Know About With Debt Consolidation

Reading through all the debt consolidation forum posts and blogs I realized there are important issues to be addressed.

Using Your Property

This could save you a couple of thousand on interest, as interest rates on home loans are cheaper than credit cards and unsecured personal loans. There is a tiny snag to this. Read more »

Debt Consolidation Programs For Those Drowning in Debt

What is the Best Way to Consolidate Credit Card Bills?

Nedbanks’ Twitter Account Suspended

Right, seems a bit strange…

I tried again and click on Nedbanks’ Twitter account.

Nope, I still get the following message….. Read more »

The Importance of Living Free of Debt

While I am pondering what it really means to have zero debt, I remember what it actually feels like.

About 5 years ago I took a VSP (Voluntary Seperation Package) to seek some greener pastures.

The freedom that brought was immense. Without any debt (and a boss) I could do whatever I imagined.

Obviously I had the finances to back me. (I don’t recommend you just pack up and go if you don’t have some financial backing! Doesn’t matter how fed-up you are with your circumstances.)

My point is … it felt as if a huge “mountain” has disappeared.

You can read my first article in a series of debt free living on the website “What Free from Debt Really Means”