Buying Distressed Properties

Statistics report that distressed properties make up about 50% of houses sold in December.

When I say distressed properties, I mean both houses that are going through foreclosure proceeding and also houses that are worth less than the mortgage owed on it (houses under water). Because there are so many distressed properties out there, many of them have to be bought before the real estate market is propped back up. With that said, right now is a great time to buy distressed properties as they are going well below what they are worth in a stable market. However, you should realize that buying distressed properties is quite a bit more complicated and arduous than buying a non-distressed property. Here are some tips for buying distressed properties.

1.Do not settle for the listed price. In a buyer’s market, you should never settle for the listed price. Negotiate your way down. Negotiating on a foreclosure property is a quite a bit easier than a short sale. That is because a foreclosure is a two-party deal — you and the bank (with a listing agent assigned by the bank). However, with a short sale, you have three parties with competing interests — the lender, the homeowner, and you. Because the bank owns the property and wants to eagerly get rid of it, negotiating for a foreclosure property is going to be easier most of the time. With a short sale, the bank isn’t force to do anything because the home is still in the homeowner’s name. That is why negotiating a short sale with a desperate buyer works best. That is because a desperate buyer who does not sell his or her home will soon have to go through foreclosure and the bank definitely does not want another foreclosure on its balance sheet. Do understand that when you are going through a short sale that you are dealing with not just the bank but also the homeowner who is going through financial trouble. That is why you should be relentless but also have some empathy and be fair — because that could have been you. https://aplacecalledhome.net/

2. Be prepared to wait. Foreclosures and short sales is a very long process. That is because everything has be approved by the bank. When the bank is approving it, it has to go through multiple channels. It is not unusual for a deal to take six months to go through if it is a short sale.
3) Know how many lenders you are dealing with. Dealing with more than one lender is going to be more complicated than dealing with just one and will take longer for the deal to go through. This deals specifically with short sales. To do this you want to check public records.
4) Be proactive, especially with short sales. Banks are known for being incommunicado when it comes to distressed properties. They can and do go months without communicating with your agent. So be wise and pick and agent who is willing to be proactive and get in touch with them.
5) Be sure to find an agent who has bought distressed properties before. Buying distressed property is a specialty within the real estate circle and getting an agent who specializes in distressed properties can mean the difference between you getting the house of your dreams or walking away without a deal. Real estate agents who specialize in distressed properties are able to find houses that have a legitimate chance of selling and can act to expedite the paperwork process.
If you follow these steps, you will greatly be more prepared when you are making an offer on a distressed property. Remember, distressed properties come in two forms: foreclosures and short sales. Each one has its own unique twists. This is just a general guideline. You should always consult a real estate agent who specializes in the type of property you want to buy.