Repossessed home/Public trustee sales

If you are looking for the sort of incredible foreclosure sales bargains they have in the USA, that doesn't happen here. I'm not sure exactly of the legal reason but Australian banks are not permitted to sell for the debt owning. If anyone knows the reason, I'd be happy to hear it as I've wondered about this for years.
 
If you are looking for the sort of incredible foreclosure sales bargains they have in the USA, that doesn't happen here. I'm not sure exactly of the legal reason but Australian banks are not permitted to sell for the debt owning. If anyone knows the reason, I'd be happy to hear it as I've wondered about this for years.

I am not a lawyer so this is probably wrong....

In Australia when a bank forecloses a house, the bank is obligated to sell it at the best reasonably obtainable price. The bank has to properly market it and then it goes to auction. Assuming the bank made a reasonable effort, it can accept any price at the auction.

The only reason there are no super bargains in Australia is because there are lots of buyers so even a bank sale gets a good price.
 
Yes, I am involved in this area for one of the major banks. They take getting the maximum sale price on behalf of the previous owner very seriously and monitor the valuation price vs the result received at auction. Don't expect a bargain.
 
Yes, thats what I thought the situation was here. One question remains, is it "bank policy" to get the best price for the person having to sellhere in Australia or is there legislation in place to ensure that banks dont just sell to recover the debt only.

I even wonder what drives this whole foreclosure this in the USA, Bank policy or legislation??

hehe, I think too much ... I must have too much time on my hands at present :)
 
hehe, I hope those deleted comments weren't 'taking the p*$$"

I'm 53, very cranky and very surprised at some of the stuff that goes on here on this board.

:):):):):)
 
yes, that drives the actual foreclosures but I wonder whether the decision NOT to foreclose for the $$ owning but to go for the best market prices are the banks decision or is there some protective legislation in place...in other workds, is there something making the banks in Oz "play nice" when al they really need to get back is the debt owning (as in the USA)...
 
Yes, I am involved in this area for one of the major banks. They take getting the maximum sale price on behalf of the previous owner very seriously and monitor the valuation price vs the result received at auction. Don't expect a bargain.

With the homes going to auction you may very likely get a bargain depending on what the market is doing, and the area as a whole. Let me explain.

In Melbourne, it is commonplace for many homes to be sold at auction. One more in the mix (mortgagee property) does not change anything. However, go to an area where auctions are few and far between and it is a totally different kettle of fish. For instance, for arguments sake, lets say that property is NOT flavour of the month. There are few buyers and even fewer of them are investors. The property that is being auctioned is perfect for a first home buyer, but first home buyers are too nervous to bid at auction. A savvy investor in these circumstances can, indeed, pick up a bargain.
 
Savannah

In Australia I think there is a common law precedent.

Once upon a time a bank in Australia repossessed a house and sold it off quickly without trying to get the best price. The owner of the house took the bank to court for lost profit on the sale and won.

So banks are now required to get the best price reasonably possible when selling.

Of course I could be completely wrong.
 
Under section 77(1) of the Transfer of Land Act 1958 (Vic) the Mortgagee must sell the possessed property in good faith while considering the interests of the mortgagor -- i.e. they must get the best possible price.
 
Thanks RM, that was the answer I was looking for. Obviousloy there will be similar legislation on each state and the original legislative process may well have been triggered at the time by the case mentioned by Tom1000000.

Thank you to everyone who replied to help clarify this for me.
 
Top