Distressed property listingsalso known as pre-foreclosures or short sale homes are a common fixture in the housing industry
. It is common because a lot of home owners facing foreclosure do not wish to destroy their credit reputation nor cause their family any embarrassment an actual foreclosure can bring. So they opt to sign off their property along with its outstanding obligations to prospective buyers.
What Can Distressed Property Listings Offer Buyers?
Homes under distressed property listings have typically been in mortgage default for around three months and are facing the prospect of foreclosure. Buying directly from the owners of distressed properties can give buyers ample time to analyze the property before making a decision. During this time they can study their prospect, have the home inspected and look closely into the title along with all the other documentation relating to the property.
For the most part, the owners of these properties are eager to negotiate as they would much rather offer their homes to buyers than have it foreclosed by the bank. These home owners would want to secure their credit rating and recover a portion of their investment on the home. They will be very flexible in terms of price and terms of payment and open to other suggestions the potential buyer may have.
What Should Buyers Look Out For?
The main drawback of homes in distressed property listings is the general condition of the property. If buyers have been unable to meet their mortgage obligations, then it is fair to expect that they have also been unable to maintain the property. This translates to possible costs for buyers as they would have to foot the bill for fixes and repairs. Then there are potential problems that could arise from the home title if the research is not thorough. Buyers may face added costs such as liens or holds, fines and penalties for late payments on top of the unmet mortgage.
Finally, when buying distressed property listings one has to have time on their side as they practice a good measure of patience. Negotiations will be mostly free-wheeling and can sometimes turn volatile as you will be dealing with private individuals undergoing a trying phase in their lives. One also has to understand that the process of eviction may also take longer and that it will be the buyers burden to carry out. In general distressed property listings are reasonable deals as long as buyers are focused on tying up all the loose ends.