What to Know About Buying a Distressed Property
Short sale and foreclosure homes, also known as distressed properties, provide a unique buying and selling opportunity in the housing market. While typically priced lower than regularly sold houses on the market, there are some things you, as a buyer, should be sure to keep in mind before putting in your offer.
Foreclosed homes generally sell at nearly 30% lower than the medium price of other homes on the market. The loan closing process can move quickly enticing buyers looking for a quick deal.
However, don’t let these pros blind you from making an educated decision on the entire process. Foreclosed homes can have more damage to them from neglect. Owners could have been forced to move out moths prior to your purchasing the property. Make sure the have the home carefully inspected. Skipping this important step could end up costing you more in the long run ultimately making the purchase more expensive than just buying an average home on the market. This oversight can also result in excessive time and energy spent to get the property back up to par or even move-in ready.
A home in short sale is generally in better condition than a foreclosed home. The tenants are often times still residing at the property therefore keeping it maintained and livable.
When it comes to closing the deal on a short sale home, the process can take a much longer time than normal. Be sure to check if the property has multiple mortgages, which can create a more complicated and stressful process. Each borrower on the property must consent to having the home sold via short sale. This process alone can cause problems if not everyone agrees on selling the home.
Buying a distressed home can save you money as well as relieve the nation full of government-owned properties. Before starting the process, make sure you are working with a professional Realtor experienced in these types of transactions to avoid wasting time or getting stuck in a difficult situation. Remember that even though the quick mortgage loan process can be enticing, you should never skimp on inspections of the property or researching insurance and legal issues associated with these unique transactions. Do your research and talk to a mortgage and housing professional before diving in.