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.
- 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!