subject: Is It Time To Buy Distressed Properties? [print this page] Many of you could be asking, It it time to buy distressed properties? Or, is it advisable to buy distressed properties? Oftentimes, the media over-sensationalizes the thought of buying foreclosure houses for pennies on the dollar. It is true that foreclosed homes can offer a good value for your money. But, is buying distressed houses a good idea? In this article, we will share with you tips that will help you decide whether buying foreclosed houses will make you a successful property investor in the end.
In February alone, the home sales for distressed properties was a whopping 48% of the total home costs. This was according to the Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions.
Short sales are a type of distressed properties. Short sales occur when lenders accept a lower amount than what is actually owed on mortgage. To date, these transactions account as a main category of distressed properties and are highly beneficial to homeowners who want to avoid foreclosure. Through short sales, these homeowners also get a chance to buy a property below market value. If you want to consider this type of transaction, just keep in mind that most mortgage lenders move slow so you need to have a high level of patience before you get involved.
Most bank-owned properties have already gone through the foreclosure process and are owned by mortgage lenders. These lenders would not want to be stuck owning and maintaining REOs so they usually sell the properties at a very cheap price. Some banks that own REOs can even offer mortgage to their buyers. To ensure best results, do your homework by shopping around for mortgage quotes. Generally, it takes less time to purchase an REO than buy a short sale.
Everybody can surely find a wide range of distressed properties sold below market value. Nevertheless, that does not mean that you will no longer have related expenses. More often than not, these properties have been neglected and badly damaged by homeowners so you will need to allot a generous budget for renovation. When shopping for mortgage, it is not enough that you compute your monthly payments. You also need to come up with a draft estimate of your renovation costs.
Keep these tips in mind when searching not only for distressed properties but for any type of real estate inevstment. For a list of houses in your area, you can go to www.rehablist.com.
