Friday, September 16, 2011 / by Ira Miskin
A distressed property can be a foreclosed home owned by a Bank or investor. It can be a short sale, sometimes referred to as a “pre-foreclosure” property. It can be a home being sold because of a divorce, or an estate owned property. No matter the condition of the property - and they can range from neat, clean and in move-in condition to smelly fixer-uppers or even total rehabs - as the Buyer, you must view both the property and the sale from the point of view of the seller, or you will have a really difficult and unpleasant experience when trying to actually buy and close on a distress sale transaction.
Here are some of the “strings” attached that must be either tied into neat bows or removed altogether in order to have a successful distressed property sale for one of the fastest growing categories of distress sale purchases, the short sale.
A short sale property is one in which the Seller can no longer afford to keep the home and is asking their lender, or lenders (often a home will have more than one loan that must be satisfied) to accept a loan payoff amount that is less than the seller owes and forgive any deficiency (the amount not paid back by the seller at closing) allowing the sale to close with no further debt burden for the seller. There are many reasons why a seller must short sale their home including job loss, divorce, personal or family illness resulting in extreme financial distress… and intense personal distress. Although the home may be in good condition remember, the sellers are definitely in distress. These homes are usually sold in “As-Is” condition with a variety of special stipulations and sale conditions. The time frame to close a short sale transaction can range from sixty to ninety days on the quick side to many, many months. Many of these homes can be purchased at below fair market prices. A great deal! But unless the Buyer is willing to wait for the seller’s lenders to assess the short sale request, assess your offer and make a decision about whether to even accept the short sale vs. foreclosing on the property, making an offer on a short sale property can be an exercise in futility.
From the seller’s point of view, when a Buyer loses patience and pulls out before the short sale negotiation with their lenders can be completed, it often kills the seller’s chances of finalizing a short sale and they lose the home to foreclosure. From the Buyer’s point of view, if the seller’s Realtor fails to keep the buyer updated and informed, even if there is no progress to report, the absence of information scares buyers who come to believe nothing is happening or will ever happen, and prompts them to rescind their offer before the seller can complete the short sale work to close the sale. Lose-lose.
If buying a sort sale property offers the best opportunity for a great home that may need nothing more than some TLC, be sure the Realtor you choose to guide you through the process has experience, patience and tenacity to help you walk knowledgeably through this often difficult but usually rewarding purchase process.
There are many excellent opportunities to purchase a distress sale property. This Distress Sale video series will help you choose which type of distress sale property is best for you.
For access to a complete series of free video and informational emails that can provide you with many of the important strategies and information you will need to make the best home purchase whether it is a distress sale property, retail sale or new home construction, you can CLICK HERE ==> SPECIAL E-MAIL SERIES REPORTS and ask for the free no obligation series of email reports to be sent to you regularly over the next few weeks. Just put FREE BUYER VIDEO EMAIL SERIES in the subject line.
If you just want to start out by searching the MLS to see what types of distress sale homes are available in your projected price range and area of preference CLICK HERE => SEARCH THE MLS FREE
When searching, remember: Distress Sale property purchases require patience and focus.