Secrets to Buying Distressed Properties

The media is filled these days with news about distressed properties. Following is a tutorial on distressed properties to help you separate some of the fact from fiction:

Distressed Properties Defined: Contrary to popular opinion, distressed properties are not always in bad shape. In fact, the term “distressed” has less to do with the condition of the house than it does with the status of the mortgage. Basically a distressed property is one that the bank has foreclosed or for which the current mortgage is worth more than what the owners are able to ask when selling.

How to Find a Distressed Property: Finding a distressed property is actually a simple process these days. Research indicates that approximately 25% to 45% of all properties recently sold may be considered distressed. With an estimated 300,000 more of these properties entering the market each month, it’s a trend likely to continue into the foreseeable future.

Benefits of Buying a Distressed Property: One of the benefits of purchasing a distressed property is the ability to save a substantial sum over the previous selling price. Combined with historically low interest rates and other possible incentives, distressed properties offer a unique buying opportunity. Lower sales prices often mean decreased closing costs, reduced private mortgage insurance and even lower insurance and taxes.

Cautionary Considerations:
Buying a distressed property isn’t without drawbacks. They are often sold as-is and may require substantial repairs or maintenance. Likewise, purchasing a distressed property may require more time, especially in the case of a short sale. Waiting for bank approval may result in missed opportunities for other prospective properties. It’s essential to perform due diligence and understand the total cost of purchasing a distressed home, including condo or homeowners association fees. Working with a qualified agent is one way to save money and protect yourself against the pitfalls associated with distressed properties.

Three Tips to Help You Sell Your Home…Fast

Whether you are relocating, purchasing a new property or simply needing to move ahead, it’s sometimes necessary to sell a home fast.

Unfortunately, that is sometimes easier said than done, especially during a buyer’s market.

There are however several steps that you can take to help move your property quickly.

Work with an Experienced Agent: A surprising number of people try to sell a home on their own. Most turn to a professional agent after a few months, but the damage is already done. When time matters, go with a pro right from the start. Remember, the agent is acting like a publicity manager for the property.

Tackle Those Tough Jobs: Clear out the clutter and yard debris and then ask your agent for an honest appraisal of the property. Be sure to complete the “honey do” list to avoid competing against foreclosures and other homes with deferred maintenance. Not only will the home show better, but photographs, virtual tours and open house events will generate more interest when the home looks its best.

Invest in an Inspection: For approximately $400, an inspection might be one of the best investments you make. It demonstrates the condition of the home to prospective buyers and helps ease their minds. If you have access to a recent survey and appraisal, be sure to include those in the information package given to prospective buyers.