subject: Profit In A Distressed Property [print this page] There is an increase in numbers of properties foreclosed by banks as reported by the Realty Trac, the leading online market place for foreclosure properties today. It is said that there is an increase of 4% in this years third quarter which is exactly 930,437 properties. Imagine how fast its growing and still it continues to accumulate all over the world.
Have you ever thought of finding comfort in these distressed properties? Due to the continuous increase, banks are trying to sell them and put them in auction with greater discounts. Banks doesnt want these properties staying idle in their care. They want to dispense it as soon as they can so that they can get the money back and that is why they are selling it off at lower market value.
Commercial or residential foreclosure properties, short sales and realty estate owned properties are called distressed properties. These properties are seized by banks due to default in mortgage payment or in the brink of foreclosure.
Foreclosure is the seizing of property because the borrower failed to pay the mortgage or ignored the notice of payment sent by the lender. The borrower will receive a notice of default if he/she stopped paying the mortgage. The lender will put the foreclosure property to public auction and sell it to the highest bidder.
Meanwhile, Short sale occurs if the property is near foreclosure. The borrower urges the lender to enter to an agreement of accepting a payment lower than what the borrower owes the lender. To avoid long processing of foreclosure and its expensive cost, the lender agrees to accept the deal. The lender is then paid when the property is sold off.
When foreclosure properties arent sold off at a public auction, this became realty estate owned properties or REO legally repossess now by the lender, typically a bank. Because of its poor condition, the bank will try to sell it off with the help of professionals to a lower price stripping it off of the liens and other expenses. . Most buyers of REOs are real estate investors because they will try to renovate the whole property and sell it to a much higher price. One convenience of buying realty estate owned is that the seller is no longer included in completing the deal.
Purchasing distressed property is a great investment because it only requires a little amount of money for the buyer. In todays house market, increasing amount of people is considering to buy distressed properties to have greater discounts. Some arent buying it for residential purposes but to make use of it to earn profit. Other people want to enter the business world and are trying to find something that could last a lifetime. Investing in real estate isnt only a lifelong business but also a high earning profit transaction because the value of the houses increases as years come. So when the time comes that the propertys value appreciates, the once distressed house becomes the sought after estate.
Do not be afraid to invest in distressed properties for you may never know what comfort it might bring you. You just have to make it work and pull it together. Learn more about these properties and gain from it.
