When looking for housing, there are often advertisements for the sale of apartments and houses, that are pledged to the bank. The question immediately arises: are there any risks in such a purchase?
We tell you how you can buy mortgaged real estate, what risks exist, as well as the pros and cons of such transactions.
For comments, Krisha.kz turned to the Banking ombudsman of Kazakhstan, Darkhan Nurpeissov.
What is a pledge
A pledge - is often most a property, that was bought with a mortgage. It can be an apartment, house, shop, plot, etc.
That is, when a bank gives money to buy a home, in return it takes, it as collateral, keeps documents for real estate. An official encumbrance is also issued through the estate real estate database.
And although, according to the law, the buyer-borrower is the owner, without the permission of the bank, he cannot dispose of the mortgaged housing, for example, redevelop it, sell it, rent it out.
Banks also impose certain requirements on collateral by year and materials of constructions, purpose, technical condition, etc.
What are the risks involved in buying mortgaged property?
On the legal side, transactions with pledges are no more dangerous than others, and in some ways even safer.
You don’t have to worry about the purity of the transaction, because banks thoroughly check the documents for the apartment.
The main thing is to find out, if there are any delinquencies on the mortgage.
If there are no mortgage debts
With zero debt, you can buy collateral as a part of a voluntary sale from the borrower.
First you need to get permission from the bank. Credit committees consider such applications within five business days.
How the buyer can do:
1.Fully repay the bank loan for the seller.
The method is suitable, if the buyer has the required amount in cash or on the account and does not need to take out a mortgage. He needs to pay the debt, remove the encumbrance and make a deal.
There is a risk – after the removal of the encumbrance, the seller may refuse the transaction. Therefore, the buyer must first draw up a preliminary contract of sale with the seller and indicate in it the conditions for the transfer of housing and settlement.
2.Accept the debt of the seller, that is, re-register the mortgage for yourself.
Transfer of debt is also possible only with the consent of the bank.
The buyer must:
-write an application to the bank about readiness to accept obligations under the loan with the transfer of rights to collateral real estate and become a pledger;
By the way, banks are reluctant to go for the second option. It is more profitable for them, that the buyer takes a new mortgage. At the time, voluntary sales are the most common transactions with collateral.
If there are mortgage debts
But, when there is a delay on the loan for more than 90 days, the forced sale procedure begins.
There are three types of procedures:
All of them have strict regulations.
It is held at auction, but the seller-borrower can apply to the bank for an independent sale of collateral.
Self-realization is allowed within three months from the date of issuance of the relevant permit by the bank.
If the pledge is not sold, the bank has the right to sell it at auction.
Before trading, the bank must:
-send a notice to the borrower about the start of the sale of the object;
-register a notice of auction in the PSC;
-publish on your website and in the media information about the sale of collateral, but no later than 10 days before the auction.
Important: The minimum sale price of the collateral must be 75% of the appraised value. Another condition is that the evaluation report should not be more than six months old.
Judicial implementation is carried out by bailiffs through electronic auctions for loans, for which there is a court decision on recovery.
To participate in the auction, buyers, there must be at least two of them, are required to apply and pay 5% security deposit of the original value of the property. The contract of sale is concluded after full payment.
When the auction is recognized as failed (the second participant did not appear or the winner did not pay the required amount on time), and the pledge becomes the property of the bank.
In this case, the bank acquires a pledge under a sale and purchase agreement, and the mortgage agreement is terminated.
Important: the bank is obliged to sell the pledge at the auction within three years the date of receipt of its ownership.
-If earlier banks could, at their own discretion, sell collateralized property on the terms of civil legal transactions, the terms of which the bank determined independently, now holding an auction is a prerequisite. In any auction, bidding must be at least two participants, which helps prevent dishonest actions on the part of the bank, the banking ombudsman explained.
Auctions are held in two ways:
*English, when the minimum sale price is set and increases during the auction;
* Dutch, when the price decreases.
The step of increase/decrease depends on the participants of the auction.
Advantages of buying mortgaged real estate:
*Legal cleanliness of the object.
*Property prices may be lower, than market prices, especially for urgent sales.
*Sellers are more willing to bargain.