And what should I look out for or be aware of when purchasing such a property?
A: Bank mandated or distressed sales aren’t always advertised on the normal property portals. The easiest way to find distressed listings is to get in touch with an estate agent from an agency affiliated with all the major banks.
Bank mandated sales can be bargains but it is a mistake to assume this is true without doing further investigation. Research recent sales of similar properties in the area to understand where the distressed home fits into the market and chat to a local estate agent to get the inside scoop.
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It’s also important to find out as much as possible about the property itself. Is it empty or tenanted? Are there any outstanding sectional title levies or municipal rates? Are there any restrictions on usage or building? All of these things can affect the viability of a purchase.
It’s always advisable to do a proper inspection of the property before any purchase. Ensure you obtain a copy of the seller’s disclosure document – a document in which the seller lists all the defects he/she is aware of – so that there are no unexpected discoveries when taking occupation of the property later.
There is plenty of competition among buyers to get the best-distressed property bargains, so get prequalified financially, meaning you will know exactly how much you can afford to offer.
Be ready to act quickly or risk losing out. Know what you can afford, know the property’s value, and set firm limits. A bargain is only a bargain if you get your price right. – Tony Clarke, managing director of Rawson Property Group