Purchasing Distressed Properties
Most of the homes for sale these days fall under the distressed properties category. They are homes that have gone through either foreclosures or markets as short sales. In short sales, the homeowner cannot afford to keep the mortgage, but the lender, instead of foreclosing, agrees to sell the home for less than the money owed.
Lenders are particularly interested in getting these homes sold. Many of these properties can be bought for a percentage of what they would have commanded five years earlier. Buying a distressed property involves different dynamics than traditional sales and may require more paperwork, which could result in a longer transaction process and sometimes more frustration. Thus, many home buyers shun away from buying distressed homes. However,if you have the time and patience, they’re worth a second look. Today is the perfect time to buy a distressed property, with low interest rates and plenty of homes available in the market.
Since homeowners want to get the home sold right away, most likely they will keep it well maintained and in good condition. However, it is always good practice to get the home inspected before making an offer or before putting down earnest money. The inspector will assess the structure and could establish problems that could be costly to repair. Usually, banks sell foreclosed homes, as is which means they will not make repairs on it, even in a short sale.
To determine the true worth of the property in the market today and not what the seller is asking for it, check out the tax records and comparable sales. Realtors can also give you a good opinion of the properties worth. Make a smart home offer right from the start. This is particularly true if there are other bidders on distressed property.
Another thing that you should keep in mind, is not falling in love with a distressed home too quickly. It would be difficult to walk away if things do not work as you plan. Such as problem with the title, or the negotiation does not met your satisfaction, or the lender rate is too high, or maybe you find a better deal on another property.
There are indeed great deals that you can find in the distressed real estate market today. Nevertheless, it takes your utmost patience, research, some extra effort and time to be able to get the home. As long as you are realistic about it, distressed homes could be a good investment that could save you thousands of dollars and get you your dream home.