Read this before buying a repossessed house

If there’s ever sound advice to be received, it’s that buying property is one of the best investments to make. Not only does it afford you freedom, but it is also a form of wealth and the most valuable asset you can have in terms of equity.

Buying a house requires the individual(s) to get bond approval from the bank, in addition to putting down a sizeable deposit. The price of property also increases and especially if the area is sought after as well. Overall affordability is determined by this, as well as the bank’s approved qualification band.

The most appealing aspect of repossessed homes is that they may be purchased at (very) low prices because the bank is simply looking to recoup its costs. There are a number of financial advantages for someone going the repo route and that includes the granting of 100% home loans and not having to pay transfer duty.

While repossessed homes might be an appealing prospect for most prospective buyers, there are a couple of factors to be mindful of. Gumtree, in conjunction with Ooba Home Loans, has put together a list:

What you see is what you get – You won’t know the condition the property is in until you see it for yourself and what you see is what you get. It goes without saying that if the previous owner couldn’t make monthly payments, there’s a good chance they didn’t keep up with repairs and upkeep. It’s usually a good idea to put money aside for any renovation job to be safe.

Outstanding bills -If any bills remain unpaid, it is your responsibility as the new homeowner to pay them. This can include everything from municipal services to utility expenses, and they won’t be available until the outstanding amount(s) is paid. In other words, you’re paying off the debts that the prior owner couldn’t.

Occupants may still be living in the house – While it is common to view and get a feel for the home before putting pen to paper, it is possible that the current owners of the home will still be present. They are legally protected, therefore admission will be difficult unless there is a prior arrangement (between the two parties) in place.

Now that you’ve got the knowledge, it’s time to shop! Head to gumtree.co.za or your Gumtree app (click for Apple & Android) and don’t forget to use your location settings to find local service information close to home.

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