To decide between buying distressed property vs. regular property, don't expect good homes for extremely cheap prices.
If you're trying to decide between buying distressed property vs. regular property, you probably already know that the market is full of distressed properties that may be bargains. Before you decide to buy a foreclosed home, be aware of the risks.
When it comes to buying distressed property vs. regular property, you may be interestest in distressed properties because of their reduced prices. In many cases, distressed properties are priced at or below market value because they did not sell at a foreclosure auction and are owned by a lender.
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A bank may want to get a real estate owned (REO) property off of its inventory, but needs to recoup as much of the original mortgage as possible. You need to make a reasonable offer, especially if the home is in decent condition or if it's in a desirable area. Offers substantially lower than the sale price are almost always refused.
Home prices vary by location whether the homes are distressed or regular properties. You probably won't be able to buy the home of your dreams in a high-end neighborhood for very little money. The cheapest distressed properties are typically in the least desirable areas.
If the home is not centrally located or if it's in an area where many of the residents live at or below the poverty level, you need to consider whether that property is a good investment. Many formerly low-income communities around the country have gone through resurgences thanks to people and corporations investing in those areas. Buying distressed property in an area on the upswing may be a good move. On the other hand, it may be difficult to resell if the area remains downtrodden.
When it comes to buying distressed property vs. regular sale property, be aware that you're competing with investors when you want to buy distressed properties. Many investors and investment companies have cash offers for the full sale price. Lenders are more likely to take a cash offer than wait for your financing. Plus, these homes often need major repairs and your lender may not approve the home if it doesn't pass a home inspection.
A real estate agent can help you find real estate listings of both distressed properties and regular properties. He or she can also help you research the home value of each and weigh the pros and cons of each home. If you need to find a real estate agent today, go to Reply! to connect with professionals near you.