Because of a housing shortage and unstable home prices, many people are finding it difficult to buy a home in California. For some first-time buyers it can be a difficult environment to find a home. First time buyers don’t always have the financial resources. That is why some have been looking into buying distressed properties as an alternative. But before entering the market, here are some helpful things to know about distressed properties.
Properties are properties which are being sold through default or because the present owner is no longer able to pay the mortgage are called distressed properties and are also commonly known as repos.
A property in which the owner is trying to sell the house for less than is owed on it with the lender taking the hit for the difference in order to avoid an unwanted foreclosure is called a “short sale” and is another form of distressed property.
There are those that have gone into foreclosure in which the banks and other lenders auction off properties that have been repossessed from owners who have defaulted on the loan.
Distressed properties are commonly being sold for less than the apparent value although in some cases it won’t be dirt cheap. Some of the disadvantages are that most of the time these homes come with baggage. Meaning that the process may take more time and effort. There may be legal issues as well as major repairs involved.
Also, if you’re needing to move right away this may not work for you because of the time involved. If you’re an investor you may have the time to wait. If you have a particular house type or neighborhood in mind you may not find what you’re looking for.
Dealing with distressed properties can be tricky and isn’t for everyone. This is usually the realm of investors who have the resources and experience to deal with all the issues and problems related to buying a distressed property. If you’re the type of person that is willing to put in the work and deal with the problems, it can be the way to go.