Carlton Earl Samuels, chief development financing officer, at The Jamaica National Group, says while there are several pros and cons to purchasing a house via private treaty.
He, therefore, advises prospective homebuyers to do all the necessary research prior to embarking on a private treaty sale, to avoid unpleasant surprises.
Mr Samuels explained that a private treaty speaks to the purchasing of a “distressed” property, pointing out that the house is usually put up for auction by a financial institution, in the case of a mortgagor defaulting on their loan.
“Where the property isn’t successfully sold at an auction, it then goes into the private treaty process. Under that process, the property is advertised for sale and sold to the highest bidder,” he said.
Mr Samuels pointed out that purchasers usually find private treaty sales attractive, as these properties are sometimes sold at a much lower price, than market value. However, the mortgage expert advises that these sales can be complicated, because there are several issues that may arise.
“This does not mean that buying a home in a private treaty isn’t a good invest. It simply means the prospective homeowner will need to do proper investigations into the process before embarking on a purchase,” he said.
Advantages of purchasing a property through Private Treaty
- Properties can sometimes be purchased below market value
- Inherit Tenants
- As result of JN Bank having its own in house legal team, the sale process is significantly faster. It takes, on average, 90 days to complete a sale
- Access to exclusive communities
Disadvantages of purchasing a property from JN Private Treaty
- No internal inspection of property prior to purchase
- The process of taking possession is handled by the purchaser
- The required deposit is high and is non-negotiable
- A sale can be cancelled before the sale agreement is signed based on arrangements with the mortgagor