5 Things you need to do when buying a Distressed Property

In hot real estate markets like Denver, would-be buyers often include distressed housing in their property searches to expanding their options. If you’ve been considering this type of property, it’s possible to find a great value, but only if you know what to expect along the way.  Think a bank-owned home, foreclosure, or short sale might be right for you? Make sure to keep the five steps below in mind as you make your decision.

1. Find an experienced agent- Buying a distressed property isn’t necessarily harder than traditional homes, but the processes are quite different. The first step in buying any type of distressed housing is to find an agent who’s familiar with the process. They’ll be able to guide you through the process and answer any questions along the way.

2. Get pre-approved for a mortgage –Unless you plan to pay cash, you’ll need a recent preapproval letter from a lender. The letter will detail how much money you can borrow, based on the lender’s assessment of your credit score and income. Don’t think you can find the home first and then secure financing – these types of properties go quick.

3. Keep pricing expectations realistic- There’s no rule of thumb on what the bank’s bottom line is on price. Just as with any other real estate purchase, you have to evaluate the recent sales prices of comparable properties in the area. Sometimes the bank prices the homes really low, and the home will have multiple offers over list price within hours.

4. Bid the higher price if homes are selling quickly- If the foreclosed homes you’re looking at are selling fast, the best advice on a bank-owned property is to come in at your highest and best, unless the property has been sitting on the market forever with no activity.

5. Remember, the home is sold as-is- Keep in mind that foreclosed houses generally are sold as they are. That means that you shouldn’t expect to get a discount to compensate for repairs.

If you’re ready to check out distressed property options in the Denver area, give Metrowest a shout.  We specialize in these types of sales and would love to help you start the process!

Ken Blevins

About Ken Blevins

Ken Blevins, CEO of Metrowest Real Estate Services, is a veteran in mortgage and default servicing with more than 24 years of experience in collections, foreclosure/bankruptcy, loss mitigation and real estate disposition (REO). Blevins was an original co-founder of Metrowest in 2003, a Real Estate Brokerage and Services Company focused on the resale, recovery and liquidation of distressed real estate in Denver, Colorado and surrounding metros. Blevins assumed the role of CEO in January 2014 and provides strategic direction and has management accountability for the day-to-day operations. Under his direction, Blevins drives all default management operations to maximize asset value recovery and reduce loss severity through a strategy focused on customer service and state of the art technology. Blevins has 18 years of direct operational experience in all facets of REO Asset Management having managed large national REO Disposition contracts for Fannie Mae, Freddie Mac, Wells Fargo, JP Morgan Chase, CitiFinancial, GMAC Mortgage and other various financial institutions. Blevins specialties include REO asset management, real estate investment, bulk REO acquisitions and distressed asset recovery and liquidation, and he has directed the resolution and liquidation of over ten billion in institutionally-owned residential real estate.

Get More Real Estate Market Info... Subscribe Below!

Learn more about us and find other resources on buying investment properties with us. Like us, follow us, connect!

No comments yet.

Leave a Reply