2. Check Collateral Status

After ensuring the authenticity of the certificate, the next step is to check the collateral status of the certificate. You need to know the amount of debt that is still outstanding and to which party the certificate is collateralized. Usually, the certificate is collateralized to a bank or other financial institution. To get this information, you can ask the homeowner to provide related document evidence.

3. Negotiation with the Homeowner

Negotiation with the homeowner is an important stage in this process. Discuss with the owner how to pay off the remaining debt. There are two options that can be taken:

  • The homeowner pays off the remaining debt first before the sale is made.
  • You as the buyer will pay off the remaining debt, then this amount of debt will be deducted from the total purchase price of the house.

4. Statement Letter from the Bank

If you decide to pay off the remaining debt, make sure you get a statement letter from the bank or financial institution stating that the certificate will be released after the debt is paid off. This letter is important to ensure that the certificate will be free from collateral and can be transferred to ownership.