Distressed Properties

Distressed property in Cape Coral FloridaEveryone wants to buy a home priced below the current market value. If you can find one, and it really is of more value than what you are asked to pay for it, BUY IT! Real estate has always been and will always be a sound investment if you know what you are doing. If you don’t, let someone who does help you. Facts are facts and purchasing a foreclosure property can often be difficult, but it is do-able! With the property knowledge this can be a very good way to purchase.

Dealing with Distressed Properties takes patience

 

 

 

Distressed Properties require Lots of ResearchThe first step is to understand what you are dealing with. In years gone by foreclosed homes were a good, and often inexpensive, way to pick up properties. However, that has become much more difficult now. There are several stages involved in the foreclosure process in which a property may be purchased. I will explain them in some detail.

 

Save Money on Distressed Properties in FloridaThe first stage is commonly called the 'Short Sale'. The seller is in default on their loan and they try to sell the house, but are not able to sell for the amount owed on the loan(s). The bank is presented with an offer that is less than what is owed and they decide that they will take the offer, instead of having to take back the property. This is a very complex and time consuming process. It can take months to get an answer back from the financial institution holding the loan on the property. The majority of the negotiations are done with the first lien holder. The lower the amount of the first loan, the more likely they will take a lower offer. They will work to satisfy the other lien holders as well. If they take the offer, and close the deal, then the other liens may become unsecured debt that the homeowner will need to deal with. The manner in which a sort sale is conducted is very critical. The seller should have an agent who understands the process, as should the buyer.

 

Foreclosure Properties in Cape Coral, Ft. Myers, FLIf a short sale does not take place then the lender proceeds with the foreclosure. The process normally takes months, but at some point in time a Trustee sale is announced. The homeowner normally has the ability to redeem the property prior to the sale. If the property is not redeemed then there will be a sale on date and time specified in the public announcement. These sales normally take place on the steps of the courthouse of the county in which the property exists. These days that is often an internet site instead of the actual courthouse steps. The opening bid is the amount specified, plus a number of other costs. Those may be any or all of the following; fulfilling any existing liens, back taxes, back interest payments, attorney costs, basic costs of selling, etc. It is almost impossible to finance these trustee sale properties, as they do not come with any type of warranty on the property or title. In other words, these are 'AS IS' sales. If you find a private lender who will finance it then you will pay a very high interest rate, as these are risky properties. There are professionals who represent investors and investment groups who are often seen at most of these sales. They have the money behind them to pay cash for these properties. These auctions have been known to bring pretty high prices for some properties, due to the investment nature of the purchase.

 

Distressed Property Sales in Florida

If the minimum bid is not received then the lender takes title to the property. This is what is known as an REO (Real Estate Owned). Banks are not in the real estate business. A property may be considered an REO if owned by an investment group who repossessed the property. The investment group may hold the property and wait for the right market before selling it. Banks will normally put the property on the market with a professional Real Estate Company to market and sell it. These will usually sell for the low end of the market value.

 

It is not unusual for these properties to be in need of repair. Once a homeowner realizes that they are going to loose the home they often stop taking care of the property. They may move out and leave it abandoned with no power, etc. This can then lead to mold and deterioration that may or may not be repairable. If there is serious damage to the property it may not be able to be financed, so cash will be needed to purchase it.

 

Florida REO'sAlways make sure to be pre-qualified for a mortgage before you start getting serious about a property. Understand what your financing options are and how much you can afford. A solid buyer has a much better negotiation position, so do your homework up front.

 

REO Property in SW Florida, Cape Coral, Fort Myers, Lehigh Acres

 

If you are looking for a good deal on a home, then your best bet may be to enlist the services of an experienced Real Estate Agent. Roy holds multiple broker's licenses. He has hundreds of classroom hours studying real estate and preparing to help you find the right home. We are proficient in understanding the process as well as understanding the laws of Real Estate. Most home buyers and sellers do not realize that they are required to follow all of the laws involving a real estate transaction, even if they are not using agents.

 

 

 

We are not attorneys and make no legal representation about this information. Please check with your attorney or CPA to verify.