Buying Distressed Properties
Many of the homes for sale today - as many as half in some markets - fall under the category of "distressed properties."
These are homes that have either gone through foreclosure or are being marketed as "short sales." In a short sale, the homeowner can't afford to maintain the mortgage, but the lender - rather than foreclosing - agrees to the sale of the property for less than the balance of the loan.
These types of sales have different dynamics than traditional sales - with more paperwork, often a longer transaction process and, in some cases, more frustration. For these reasons, many buyers shy away from foreclosures or short sales.
However, if you understand the potential pitfalls of purchasing a distressed property - and work with an agent who has a thorough knowledge of this market - you can get a great home at a great price.
I have been specially trained in working with foreclosures or short sales through the Certified Distressed Property Expert class or a similar course. I can guide you through the process and help you locate and purchase just the right home for you.
This is an outstanding time to buy a home - distressed property or not. With historically low interest rates, and a glut of homes on the market in most areas, there are bargains to be found. And the U.S. tax credit of up to $8,000 for first-time buyers - good for a home purchased before Dec. 1, 2009 - makes purchasing a home even more attractive.
Is a distressed property for you? Here are pros and cons of buying one.
Advantages of Buying a Distressed Property First, you'll be dealing with a highly motivated seller – either a bank in the case of a foreclosure, or in a short sale, sellers who are in financial trouble and very interested in getting out of a mortgage they can no longer afford.
These types of sales take much of the emotion out of the process. You won't be insulting anybody, for instance, if you make an offer that's lower than the asking price. (That's not to say that the low offer will necessarily be accepted, of course.)