Buying a distressed property can be an appealing option for would-be home buyers looking in particularly competitive markets like Denver. The processes is a bit more involved than traditional housing options, but the end result could be a great deal. Check out the five tips below that will help you as you set out to find a distressed property that works for you.
1. Find a real estate broker and lender
The goal of combing through foreclosure, short sale, or bank-owned properties isn’t always necessary to find a house; it’s to find an agent. Banks usually hire real estate brokers to handle their REO (real estate owned) properties.
- Get a pre-approval letter
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.
- Look at comparable properties before making an offer
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, or “comps.”
- Bid Competitively – Especially if homes are selling quickly
If the foreclosed homes you’re looking at are selling swiftly, come in at your highest and best, unless the property has been sitting on the market forever with no activity. If you’re going to be upset because you would have gone $5,000 more but you lost the property, just bid the higher price in the first place.
- Remember, the home is sold as-is
Keep in mind that distressed 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 consider distressed property in the Mile High City, the first thing you need to do is find an experienced professional. Metrowest specializes in these types of sales – contact us today to start the process!