There are an abundance of properties on the market these days that may be in some form of distress and available for purchase.
Following are some tips and information that will take the uncertainty out of purchasing and financing such a property:
A short sale is a property where the lender is willing to sell it for less money than is owed on it by the existing owner.
This is often due to the owner being unable to make payments. The property may or may not be in foreclosure.
A foreclosure is a legal process by which the lender takes back the property from the owner.
These situations often offer amazing opportunities to purchase a home, but setting your expectations appropriately will help make the process go more smoothly.
First, these properties almost always take longer than traditional sales to complete, as the original lender is involved in the mix. Expect 60-plus days on these.
Depending on the volume of distressed properties that the lender is dealing with, even getting an answer to an initial offer may take several weeks to several months. Lenders often receive multiple offers on each property, which all need to be considered before a decision is made.
Financing a distressed property is similar to financing a nondistressed one.
You will want to have a real estate agent representing you in the transaction, and you’ll want a real estate attorney who regularly handles these types of transactions. There are many twists and turns in the process, and questions may come up that are outside the scope of what a real estate agent or a mortgage professional is qualified to answer.