The simple definition of Distressed property is a property that is in poor physical or Financial condition.
This is a general term used for any property in poor repair, is currently or on the verge of default, is owned by someone who is currently experiencing financial difficulty, or is a property where the total dollar amount of liens owed against it exceeds its current market value.
Many of the homes for sale today fall under the category of "distressed properties." These are homes that have either gone through foreclosure or are being marketed as "short sales."
In a short sale, typically, the homeowner can't afford to maintain the mortgage, but the lender - rather than foreclosing - agrees to the sale of the property for less than the balance of the loan.
These types of sales have different dynamics than traditional sales - with more paperwork, a much longer transaction process and, more frustration. For these reasons, many buyers shy away from foreclosures or short sales.
However, if you understand the potential pitfalls of purchasing a distressed property - and work with an agent who has a thorough knowledge of this market - you can get a great home at a great price.
The term REO means Real Estate Owned. This means that the property is owned by a lender, most often a bank. After a failed attempt at selling the property at a foreclosure auction, it is returned to the bank that held the original mortgage. These are great houses to buy for investments, they have a clean title and you can inspect the house before purchasing, unlike when they are being sold at the foreclosure auction. They usually need repair work, ranging from cosmetic items like paint and carpet, to full rehab down to the studs. This is where the expertise of a Professional Realtor will help you make the right decision based on the current market, the cost of repairs and the return on your investment.
The basic answer to what a short sale, it is a property that sells for less than the balance owing on its mortgage. A short sale can be an underwater home, an apartment building or even vacant land. If there is a mortgage balance that is greater than the market value of the home, that property is a short sale.
Steve Malik and his team have over 20 years experience helping buyer and sellers in the Real Estate market. Steve has been Certified as a Short Sale specialist.
What does this mean to you? He has 20+ years of experience helping homeowners successfully navigate the short sale process and all its pitfalls.
Sellers should always get legal and tax advice before completing a short sale.