Thinking of purchasing a distresssed property?

By
Real Estate Agent with BHG Real Estate III

Granted there are some great investment deals in the distressed property market. Here are ten rules that may assist in the process.

1. Have the money before you shop. Most owners of distressed properties cannot or will
not accept contracts with a mortgage contingency clause. Having the loan in advance
gives the buyer an advantage in negotiating.
2. Be mentally prepared for delays, aggravations, and red tape. Buying a distressed
property could be your worse real estate transaction ever. However, it could also be the
best investment you ever made.
3. No contingencies. This will usually cause the offer to be rejected.
4. Flexibility as to the condition of the property. This is necessary as there could be
components that need to be replaced, repaired or that are inoperable. Understand that
with foreclosures and REOs there are no disclaimers regarding the property or the
neighborhood.
5. Be prepared to make an offer. The best chance of getting what you want and how you
want it is when you are not competing with another offer. When you see it – BUY IT!
6. Motivations rule the day. These need to be verbalized and evaluated. The motivation
of finding the perfect home, at the lowest price with no hassles is all but impossible
when it come to distressed property purchases.
7. Buying at the bottom of the market. The bottom of the market is not determined until
months after it hits the bottom. This is not a realistic goal.
8. Quick settlement. Many if not most distressed property sellers demand a quick
settlement as they want to be relieved of the financial burden. A quick settlement is one
that take place within 30-days from the acceptance of the offer.
9. Inspections. It is recommended that any buyer of distressed property seek the advice of
a competent home inspector to determine repairs that need to be made and the
associated cost.
10. Examination of title. A title search by a competent attorney would be advisable to any
client buying a distressed property

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Re-Bloggged 1 time:

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  1. Monique Hailer 01/24/2010 08:47 PM
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Topic:
Home Buying
Location:
Virginia Albemarle County Charlottesville
Tags:
charlottesville distressed properties
charlottesville foreclosures
charlottesville short sales

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Ambassador
2,281,149
Lenn Harley
Real Estate Broker - Virginia & Maryland
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate

I would never, never advise a home buyer to enter a contract without a financing contingency.  That's too risky. 

 

January 24, 2010 06:44 AM
Ambassador
1,609,801
Fernando Herboso - Broker for Maxus Realty Group
301-246-0001 Serving Maryland, DC and Northern VA
Maxus Realty Group - Broker 301-246-0001

Having a loan approval with you is always advisable to begin shopping for a new house

January 24, 2010 07:17 AM
Rainer
77,786
Bob Harris
Charlottesville VA Real Estate
BHG Real Estate III

Excellent points by Wallace, Lenn and Fernando. Wallace is right concerning our local Charlottesville area market. Though there are more short sales and bank owned properties than any previous time, we are not whacked like many other areas of the country. Lenn, are so right about the protection of a finance contingency, but when there are now multiple offers on foreclosures, the banks get very choosy. And Fernando, a full loan approval is like bringing a colt 45 to a slingshot party.

January 24, 2010 01:30 PM
Rainmaker
290,538
Monique Hailer
CENTURY 21 New Millennium

Bob ~Great advice on distressed properties. Maybe we should call the STRESSFUL Sales!

January 24, 2010 08:47 PM
Rainmaker
292,075
Margaret C. Taylor
St Marys/Calvert/Charles MD Real Estate Agent
Century 21 New Millennium MD

Interesting advice.  Thank you.  Margaret C.

January 24, 2010 11:02 PM
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Rainer
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Bob Harris

Charlottesville VA Real Estate
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