FirstRand Bank Properties In Possession
What Are Bank Repossessed Properties?
Bank repossessed properties are the result of borrowers defaulting on their home loan repayments to the extent that the home loan has to be terminated.
There are 3 different phases during which Buyers are able to purchase these properties: ‘Distressed Sales’, ‘Sale in Execution’ and ‘Properties in Possession’
These phases are best explained by describing the repossession process:
A borrower defaults on their home loan to the extent that the only alternative for the Bank is to recover the debt via repossession The Attorneys representing the Bank will apply for a judgment at the magistrate’s court Assuming the mortgage in arrears is not recovered, the borrower’s movable assets will be auctioned If the sales from the movable assets auction do not cover the mortgage in arrears, the property is auctioned: a ‘Sale in Execution’. Up until this point, the borrower may try to sell the property: a “Distressed Sale” If the Bank’s reserve price is not met at the ‘Sale in Execution’, the Bank has the option to buy back the property – a ‘Property in Possession’
Why are Properties in Possession popular?
There is usually no transfer duty Home loans for Properties in Possession are more easily approved by Banks Properties in Possession are perceived to be good value for money These properties have often been neglected and therefore present a good opportunity to renovate and resell
FNB takes the majority of the work out of buying repossessed properties by offering buyers up to 100% bond financing. The buyer will not be liable for any transfer duties, and FNB will furthermore pay any outstanding property rates and taxes up until the date of registration.