Opportunity for Cash Buyers

Distress property sales are increasing in spite of interest rates coming down. I think it is a delayed effect of the turn in the property market. It is a matter of to little to late from Tito. I have always believed the Reserve Bank was behind the curve, and it seems that they are slowly waking up to the fact that they need to act more dramatically. So it seems that we will get another 1% drop in interest rates in March. This will be a move outside the normal Reserve Bank meetings.

According to Elma Kloppers from Beeld, people who are 4 months behind with their bonds have increased to 35 000 in the last quarter of 2008. It is probably higher at present. This is very bad for the banks, so I will not be buying bank shares for a while (hint)!

I receive more and more calls from homeowners that are willing to sell below their bond value. About 2 months ago it was unheard of to sell short of the outstanding bond amount. Now the distress sellers are calling me to sell their houses short on the mortgage!

The banks are willing to release the bond on the house when selling short of the outstanding bond. The bank and the owner will have to agree on this. The bank will evaluate each situation and there are no fixed rules. It all depends on the situation of the homeowner.

We have an opportunity to capitalise on these situations. We can help a distressed property owner to get out of his situation and the bank will be able to remove this ‘bad asset’ from it’s books. The discount on the bond depends on how quickly you can deliver the guarantees. So cash buyers get the biggest discounts and the bank will love you for it.

So to capitalise on these short sales I need to know if you would be able to do a short sale with cash or be able to find finance via bond fast for these deals. Please email me on colin@prevent-repossession.co.za if you want me to notify you of these opportunities.