Repossession of a home or property is not something that anyone wants. In fact, it’s probably one of the most feared things any homeowner could ever face. Not only is it frightening and stressful but it can negatively affect your financial situation for years to come.
Homeowners can fall behind on their bond payments for many different reasons including redundancy, bereavement, divorce or separation or just over-extending themselves financially. When you begin to fall behind in your payments, the bank will contact you to find out what’s going on, why the payments aren’t made and to ask when you’ll be able to make your payment.
Many people make the mistake of avoiding the phone calls and letters they receive from the bank. They live in a sort of denial of their financial situation instead of speaking with their bank about the situation and trying to get it fixed. Banks will try to be understanding of financial hardships if they’re made aware of them but if nothing is done within a couple of months, they’ll usually start the repossession process.
It isn’t that banks want to repossess your home because banks do not make money on a home they repossess. It’s given to the Sheriff to sell at a Sheriff’s auction for the amount that they are owed. They don’t want to do this but will if they are left with no other choice. If they did nothing, they would not make money and it could give them the reputation that would make other bond holders not make their payments.
Contacting the bank and keeping the communication is the first and best step you can take towards fixing your financial situation and being able to stop repossession. The bank will usually work with customers to find solutions that will work for them and help them get caught up. If, however you find yourself in a situation where you’ve waited too long and the bank can’t help any more, there is another alternative to prevent repossession. This alternative is a property investor.
Property investors are often also called repossession specialists. Property investors make it a habit of buying homes that are about to be repossessed. Keep in mind that they will buy your home for less than the current market value; usually offering around 70% of the market value. Although this may be a distressing and daunting thought, the positive part is that they will take care of the purchase quickly so the home is not repossessed.
Some homeowners wonder why they would want a property investor to buy the home. They may think that either way they’re losing their home so what difference can it make if it’s sold or repossessed. The difference is that if it’s sold to the property investor, it will not go on your credit record that you had a home repossessed, which will help you if you want credit in the future. You do NOT want a repossession listed on your credit history. Secondly, the property investor will often allow you to either rent your home from them or buy it back when your finances improve.
Property investors can offer a lot of help to homeowners facing a possible repossession of their home, including possibly paying fees involved with the sale. So, don’t give up if you’re facing repossession. There are alternatives.
Dale Purdon, director and founder of IMAGINE Properties, Easy Home Sales any many more. Prior to setting up IMAGINE, Dale set out to build his own property portfolio in South Africa where he focused on acquiring high yielding rental properties in the lower end market and gained extensive experience in stock-sourcing as well as portfolio management.