What are the Advantages of Buying Distressed Properties?

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There are several types of distressed properties that potential buyers might include in their housing search options and each has its own distinct benefits. Here we’ll take a look at various types of distressed housing and the advantages that come along with them.

Pre-Foreclosure/Notice of Default (NOD)

  • Seller will be motivated for a fast sale, increasing the buyer’s bargaining power.
  • Buyer can do all standard inspections, including researching title during due diligence/contingency period.

Foreclosure Auction

  • The property will be sold for the outstanding mortgage balance owed to the foreclosing mortgage holder — this can be a low price for the property.
  • Cash payment requirements may reduce competition.

Bank or Real Estate Owned Property

  • The bank is motivated to get the property sold and will negotiate price, down payment, and closing costs, escrow length, etc.
  • Clear title. The buyer will not take on any liens, mortgage or back taxes of prior owners.
  • Inspections and mortgage financing are allowed within the normal due diligence/contingency period.
  • The house will be vacant.
  • REO sales typically close within a normal escrow period of time.

Distressed properties can be a great deal for buyers who know what to expect. That’s why it’s crucial to secure a real estate agent who’s well-versed in these types of transactions. Metrowest specializes in distressed property sales – give us a shout today and let’s start the process!


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