A helping hand for struggling homeowners

Private Property South Africa
Seeff Properties

Despite significant action by the banks to clear urgent sale stock out of the market, the problem persists. The reality is that the continued economic constraints and basic cost hikes mean that around one third of the housing market is still in distress.

He says that it is vital for the recovery of the property market that this debt is cleared out of the system this year.

The primary objective is always for these homeowners to retain their homes, but more often than not, the financial outlook of these owners is such that retaining their homes just puts them further into debt. People in financial difficulty are generally reticent to make contact with anyone they owe money to. Agents continue to encounter sellers in severe financial difficulty who are simply too afraid to approach their bank.

The issue is two-fold, many homeowners are not aware of the bank rescue packages and more action is needed to speed up the clearance of these properties out of the market. Following negotiation with the banks, Seeff engineered their ESP (Express Sales Programme) to assist such homeowners to sell their homes as quickly as possible for the best possible price. Additionally, the programme assists such owners to secure the benefits of the banks’ rescue packages such as a reduction of the loan amount and restoration of their financial standing. The intervention is also aiding in getting properties sold before the execution process where these homes generally sell for between 40 and 50 percent of their value.

This has effectively created a two-pronged approach. The objective is to take the programme into the community. The intention is not to sell these properties for bargain prices. Seeff works in partnership with the banks to deal with this issue in a responsible manner. Since inception of the banks’ rescue programmes, Seeff has successfully managed literally thousands of mandates. Last year, they sold well over 700 of these properties at between 80 and 90 percent of the valuation.

According to FNB’s latest Estate Agent Survey, around 20 percent of sellers are still selling to downscale due to financial constraints. Since the start of this year, Seeff has already received over 550 new urgent sale mandates, but that there are many more bondholders in distress.

The most important consideration is for homeowners to be informed about their options and to take decisive steps to minimize the risk of added financial stress and burden. This is not a problem that only affects the lower end of the housing market; it cuts across the market and all income groups. It is not just a problem that affects the major metropolitan housing markets in Johannesburg, Cape Town and Durban. It is not that there are more distressed properties in Johannesburg. The problem is relative; there are more people who live in the greater Johannesburg area, but the problem is no less severe elsewhere.

It is critical for homeowners in financial difficulty to deal with the problem as quickly as possible. If your personal financial outlook remains bleak, the problem is not just going to go away. In such cases, it is better to downscale or rent for a while. The longer you sit with an unpaid mortgage, the more the interest accumulates and you could ultimately end up with a financial burden despite selling the property and benefiting from a reduction of the loan amount. It is therefore critical that as much of this is dealt with as efficiently and responsibly as possible.

Seeff Sandton has been successfully operating its ESP (Express Sales Programme) for a number of years. The Seeff Express Sales Programme aims to assist the homeowner who needs to sell his property urgently – before it reaches the foreclosure stage. Their sales consultants also negotiate with the banks to secure the same benefits for such sellers as those offered by the banks under their rescue programmes. However, many home and property owners still remain unaware that a viable “rescue” solution exists for them through engaging with real estate initiatives such as Seeff’s Express Sales Programme. Seeff urges anyone who finds themselves in this situation to seek advice as soon as possible.

For more information, please contact Charles Vining, MD Seeff Sandton +27 11 784 1222/ +27 79 521 4044 or Stuart Manning, Seeff CEO 083 449 7333 or email esp@seeff.com .

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