Homeowners would have been relieved at the most recent announcement that leaves the interest rate unchanged – for now. It’s no secret that many consumers are taking strain financially with everything on the rise, the cost of fuel, the cost of food, the cost of electricity – indeed the cost of living.
This pressure may impact homeowners’ ability to meet their monthly bond obligations. It’s a terrible position to be in, but the solution is to act swiftly to mitigate the consequences.
Giel Viljoen, Principal at Leapfrog Stellenbosch, offers advice on how to best deal with a distressed property.
Distressed is the term used to refer to a property where the homeowner can no longer afford the bond repayment and has consistently missed payments – the property is then “distressed”.
Act fast, and decisively
The moment you realise you may not make your next payment is the moment you need to get in touch with a property advisor as well as the bank with which you have the mortgage. Be upfront about your situation. Inform the bank of your position before they take legal action, while at the same time working with a trusted agent to get the property on the market as soon as possible.
The goal here would be to sell the property as quickly as possible to recover costs and settle with the bank before they take the legal steps that put the foreclosure process into motion.
Work with a reputable property advisor to ensure the selling price is exactly right for the market. The right price almost guarantees a faster sale, which in turn can help to minimise further loss.
Furthermore, if there is any equity in the bond, selling faster means there’s a chance of covering both the outstanding bond and other debt with the proceeds from the sale.
Being forced to sell your property because of a change in your ability to afford is a terrible fate, and one that few homeowners anticipate. It’s crucial to act fast and sell as quickly as possible – before the debt burden spirals out of control. It’s also important to maintain a favourable credit record, for when the tides turn, and you’re in a position to afford a property again.
For more visit: www.leapfrog.co.za