“Distressed properties can have great appeal,” says Wendy Forsythe, executive vice president at Atlantic Pacific Real Estate. “Discounted prices and historically low interest rates make these homes affordable to many families who might otherwise not be able to buy a property. But buyers also need to be selective because not every distressed property is a bargain.”
Typical discounts on foreclosures are at about 19% on average. That number gets brought up and buyers have a tendency to become blinded to other relevant details that are top priorities in real estate. Here is a convenient list to keep in mind if you are looking to save the big on the distressed property sales:
Know any prior claims on the property. “If a distressed home has been financed with two or more loans then the sales process can be far more complex,” according to an article for RISMedia written by Atlantic Pacific Real Estate.
Get Financing. How does a buyer hope to purchase the property? By preparing financing in advance, buyers are able to move more efficiently when a distressed property does come on the market.
Judge the Condition. Getting a deal my result in getting in over your head. Getting a thorough home inspection prior to committing financially to anything!
Foresee Delays In Advance. Ask your realtor to talk you through any potential delays.
Source: “Buying a Distressed Home: What You Need to Know,” RISMedia (July 15, 2012)