Deals in Distressed Real Estate

Opportunity is Knocking

Foreclosure and short sale properties can be a great opportunity. If you're having hesitations it might be because you are not familiar with the process of buying a foreclosed, short-sale or bank-owned property. The key to a successful purchase of a distressed property is understanding the process and having the correct expectations.  Let Nancy David educate you on this great opportunity. I am experienced in both working with buyers and sellers in distressed real estate sales transactions.

Tips for Purchasing Distressed Properties

• With lower inventory in our areas, the distressed real estate properties in better condition are often selling closer to the non-distressed market value of similar properties as compared to previous years when the real estate market was declining and foreclosure levels were much higher.  The best deals in recent months are the foreclosure properties in need of quite a bit of repair. 

• Response times on offers or contract executions on foreclosed real estate properties will usually take a little longer than working with another individual. On short sale transactions, the lienholder approval process varies between lenders and can range from 30-90 days.  It is very important to work with a real estate agent experienced in these types of transactions.

• On foreclosed real estate properties, the bank owners will not make repairs on properties and the properties are typically offered in "as is" condition.  Should some significant unknown issue or defect be discovered during inspections, if any allowance is offered by the banks it is usually in the form of a price reduction.

• Be sure to check with your lenders guidelines on property condition requirements.  Various types of loans do have specific property condition requirements for properties.

• Buyers of distressed real estate properties may be required to pay for any costs of turning utilities at their property for inspections.

• Remember that bank of properties will not have any information on property conditions or the history of the property.  Additionally, Texas state law does not require banks to provide any disclosures on property condition.  In the sales contracts there are often quite a few notices included that the Buyer signs acknowledging that the bank owners have no knowledge of the property and that the Buyer is expected to do their due diligence in evaluating the property prior to closing.

• There are various loan programs available for rehabbing foreclosed properties such as the FHA 203K loan program (more information available on my Mortgage Resources page) and the HomePath Renovation Mortgage Program