What are repossessed houses?

Repossessed houses are as a result of borrowers/home owners not being able to meet their repayment requirements to the extent that the bank will cancel their homeloans. This results in the loss of their homes or properties and as a result the bank issues a sale in execution of the property. The sale in execution is executed by the sheriff of the court.

There are phases in the process where willing buyers are able to purchase these repossessed houses, sale in execution, property in possession. To understand how this works we will discuss the repossession process:

1. A borrower defaults on a homeloan and the only option to recover the outstanding costs is via repossession.

2. The lawyers who are acting on behalf of the bank apply for a judgement against the homeowner at the magistrates court.

3. If the home owner fails to pay the outstanding costs, the lawyers instruct the sheriff to repossess the movable property of the home owner.

4. If the home owner still fails to pay the outstanding costs even after the movables are sold, then the next instruction by the lawyers is sell the property by sale in execution.(the homeowner can still sell his or her property before the sale in execution)

A sale in execution is a property that will be sold by public auction by the sheriff of the courts on a given date. The property at this stage is still owned the home owner and he or she has the right to sell the property prior to the sale in execution. At this point of the process the homeowner has already had his or her furniture removed from the property by the sheriff's and then sold to defray the costs. This is also a very embarrassing time for the homeowner and should you decide to contact them to find out if you can purchase the property then prepare yourself because homeowner faced with the possibilty of losing their homes are usual not very welcoming.

A sale in execution generates funds which can be used by the lawyers to repay the outstanding costs but this rarely the case. the norm would be to recover money from the homeowner by sale in execution of the property but then still hold the homeowner liable for the full outstanding homeloan. This is a good point to note when approaching a prospective sale.

The process of a repossession starts much earlier than the sale in execution, usually about 12 to 18 months prior to the sale in executuion. this is usually when the judgement is placed on the homeowner and some homeowners do manage to repay the outstanding costs without the sale going through. There used to be a website that listed these judgements but they have closed down the website about 2 years ago. Agents for transunion an eperian would gather daily judgements from magistartes courts, forward that information onto them and they would list these properties, unfortuantley this website has closed so the next best thing would be to get hold of sale in executions.

As long a as homeowners default on their homeloans, there will always be properties that will be repossessed and there will always be sale in executions which will be held by public auction.