RE/MAX SELL-ECT offers help to distressed property owners
South African household debt-to-disposable income sits at around 75% and property industry experts predict that distressed properties will remain a reality during 2012.
This is mainly because banks estimate that around 70% of clients who enter into payment arrangements with their creditors, default on these arrangements within the first year. Credit bureaux statistics also show that of the 18 million people in South Africa who are credit users, 9 million have an impaired credit rating under the current criteria imposed by banks, which is in line with the National Credit Act.
Repossession of a property by the bank and a judgement in the High Court can remain against a consumer’s name for up to 30 years. Aside from the fact that the owners are still be held liable for the outstanding balance of the loan following repossession, a judgement would severely impact the ability to secure credit in the future.
Statistics show that homes sold involuntarily through a repossession achieve a selling price of more than 30% less on average than the property would have achieved had it been sold through a voluntary process, utilising the services of a real estate property professional.
Kevin Reddy, Broker/Owner of RE/MAX SELL-ECT, says that this is why 11 of his agents are Certified Distressed Property Experts that have been trained extensively to understand the options, solutions, and effective methods for dealing with homeowners facing financial hardship.
Reddy explains that the international Certified Distressed Property Expert (CDPE) course, which focuses on the alternatives that professionally trained agents, in conjunction with the banks, can offer home owners who have found themselves in distress, was launched exclusively to RE/MAX Broker/ Owners and Sales Associates in 2011.
“The CDPE professionals at RE/MAX SELL-ECT are trained to understand the uncertainty, fear and emotion that a distressed property owner experiences. They are well versed in the different programs offered by each bank and exactly what options are open to the home owner, and they understand how to fully qualify buyers of distressed properties, as there are a number of peculiarities in these sales that are not common in standard property sales,” says Reddy. “Our CDPE agents also have an understanding of correctly pricing of the property in order to minimise the final amount owing by the seller after transfer. The primary objective for RE/MAX SELL-ECT CDPE agents is to find a way to assist the homeowner to keep their home, which is also the primary goal for the financial institutions.”
Peter Gilmour, Chairman of RE/MAX of Southern Africa, who heads the group's specialised distressed property department, said that to date, over 600 RE/MAX agents around the country have received the internationally acclaimed Certified Distressed Property Expert Professional Designation.
He notes that RE/MAX of Southern Africa received over 500 new sole mandate distressed property leads this year from the various financial institutions for which the group is one of the preferred partners for handling distressed property sales.
“RE/MAX of Southern Africa agents who have been marketing distressed properties have managed to achieve, on average, 91% of the asking price. In addition, the number of offers that have been accepted by the banks has increased considerably and distressed properties have spent an average of 45 days on the market before selling,” he says.