Nevertheless, Business Insider found that the repossessed properties on recent sheriffs’ auctions in Johannesburg were being sold at an average of 42% below their municipal valuations – and in some cases at much bigger discounts – and that there was no reserve price placed on any property which was being offered for sale on auction for a second or third time.
It is thus, very unlikely, that the proceeds of these sales would have been sufficient to completely extinguish any outstanding home loans, with the result that many of the former owners will most probably still have a sizeable amount to pay off and also have to live with the debt judgments on their credit records until they do.”
However, there is no need for this to happen. Homeowners who find themselves in financial difficulties should never just give up on the situation and wait for the sheriff to attach their property and auction it off. A much better option is to immediately contact a reputable estate agent who can help them to enrol in one of the assisted-sale programmes that have been set up by the banks specifically to help financially distressed sellers. They will then be able to sell their property on the open market - before the bank goes to court to seek a debt judgment against them and start the process of repossession.
Real estate companies have plans available, which has already helped many hundreds of financially distressed clients to overcome the difficulty or embarrassment of having to approach their bank by themselves, and to escape the trauma of having their home repossessed and possibly even being evicted by the sheriff.
And we are expecting the need for this service to be even greater this year, with home loan defaults set to rise as an increasing number of homeowners experience the full effects of the employment and business losses brought about by the Covid-19 pandemic.
Properties sold through the bank assisted-sale programmes, are currently selling for an average of 85% of market value, and another major benefit includes the fact that sellers’ credit records remain intact. The banks also offer certain benefits to make assisted-sale even more attractive to buyers, such as reduced bond registration fees.
Courtesy of PrivateProperty | Gerhard Kotze RealNet