Whether you want to purchase a home for your family or have a dream of investing in real estate, purchasing distressed properties can save you a lot of money. Distressed properties are typically homes that are in disrepair, and in many cases they are short sales or foreclosures that are owned by a lender. Since distressed properties are not in pristine condition, they are typically priced a lot less than comparable homes in the area. If you're interested in buying a distressed property, use the following tips:
Work with a Real Estate Agent Who Specializes in Distressed Properties
When you're buying your first distressed property, and experienced real estate agent can be an excellent resource. Searching for distressed properties can be challenging, and the buying process can be different than buying directly from a homeowner, so it can be very helpful to work with a real estate agent who is very familiar with these transactions.
Consider the Neighborhood Carefully
It is often said that real estate is all about location, and the same can be said when buying distressed properties. It is in your best interest to purchase a distressed property in the best neighborhood that you can afford. Ask your real estate agent to look for distressed properties in up and coming neighborhoods or established communities that are already considered desirable. It is best to avoid run down neighborhoods with an abundance of distressed properties since they are typically not as good of a value.
Hire a Home Inspector and Contractor
In most cases, if you are buying a distressed property that is a short sale or foreclosure, the home is sold as-is, meaning that no repairs will be made and no concessions will be offered for the cost of repairs. If you purchase a distressed property, you will be responsible for paying for all of the repairs that are needed. Thus, it is in your best interest to have a full home inspection done and afterwards do a walk-through with a general contractor so you know exactly how much repairs will cost. In some cases, homes that seem like a great deal actually aren't due to how much repairs will cost.
One thing everyone should know about buying a distressed property is the fact that it can be a long process. Lenders can take an extended period of time to respond to offers and closings are often delayed. If you're able to be patient, you can end up buying a home for an excellent price.