"Distressed Property" is a real estate term that describes a property owned by a homeowner experiencing significant financial entanglements such as imminent foreclosure involving the home. The term can also be used to describe homes that suffer from major issues such as structural damage or severe termite infestation.
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Selling a distressed home can prove to be an insurmountable challenge for most homeowners. These homes typically sit stagnant on the real estate market as interested buyers seek out properties in the area with less problematic profiles, and bolstering their appeal also means making thousands in repairs for most sellers.
Required repairs on a property being readied for sale can also greatly increase the timeframe of the listing process as well as cutting into the final profit margin. Worse, these issues are often only discovered during an inspection as a buyer is making final assessments before purchase. Delaying the sale is an option many homeowners take, but in the interim the seller is responsible for daily upkeep and maintenance costs.
Sellers of distressed homes nearly almost always underestimate the time it will take to improve a distressed home to fetch a premium price on the open market. Comprehensive repairs to key components such as the foundation, roof or plumbing of a home can take months, and any financial or legal entanglement is a total deal breaker in the majority of cases.
Homes in relatively good condition can become impossible to sell due to outside factors as well. Problem tenants can do thousands of damage to key amenities and installations in the home upon learning of a sale, and squatters can illegally occupy the home to rule out any sale-related activity.
The Making Home Affordable site (www.MakingHomeAffordable.gov), specifies the following documentation to qualify for a loan modification.
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Lompoc, city, Santa Barbara county, southwestern California, U.S. It lies along the Santa Ynez River in the coastal Lompoc valley, 155 miles (250 km) northwest of Los Angeles. Originally inhabited by Chumash Indians, the area was part of a Spanish land grant established in 1787. The city was founded (1874) as a farmingcommunityby the Lompoc Valley Land Company, which bought and subdivided the Ranchos Lompoc and Misi�n Vieja. Lompoc (Chumash Indian:'Little Lake' or 'Lagoon') now has a diversified economy based on agriculture, oil production (since 1904), the mining and processing of diatomite, the flower-seed market of the valley (with an annual festival), and the vast aerospace complex at Vandenberg Air Force Base (just north); the air base also includes the California Spaceport, which offers orbital launches and payload processing for businesses and government. The city is also the site of a federal prison. Lompoc's many murals are popular attractions. The Lompoc Museum contains exhibits on the area's regional history. Jalama Beach, just south of the city, is a popular surfing spot. La Pur�sima Mission State Historic Park, 3 miles (5 km) northeast of the city, contains many restored buildings of the Franciscan Misi�n la Pur�sima Concepci�n de Mar�a Sant�sima, established in 1787. Inc. 1888. Pop. (2000) 41, 103; (2010) 42, 434.
Distressed Properties FAQs
What are Distressed Properties?
In real estate, if a homeowner suffers from financial problems, which render him unable to meet his monthly mortgage obligations, he is said to be in distress and the home is referred to as a Distressed Property. Based on the stage of foreclosure the property is in, it can be classified as a pre-foreclosure, foreclosure at auction or a bank owned home/repo home.
For more information, simply check our What are Distressed Properties? page.
How to buy distressed properties?
Buying distressed homes is simple enough. You only need to determine where in the stage of foreclosure is your entry point and understand what is involved in purchasing these properties. Each stage will require a different approach, so it is also crucial you do your homework even before you search for the perfect distressed property.
To help you make sure your purchase is a success, check out the How to Buy Distressed Properties page.
How to invest in distressed properties?
Considering the impressive profit potential offered by distressed properties, it is not surprising buyers are presented with numerous investment opportunities. You will find investing in these distressed homes is quite lucrative. Of course, in order to maximize the said potential, you have to make sure you know and understand what is involved in each of these opportunities.
You can refer to the Guide in Investing in Distressed Properties for more information.
How to find distressed properties?
When it comes to finding distressed properties, there are actually several ways to do so. You can choose to go the traditional route and search neighborhoods or scan classified ads in newspapers. But there is actually a more efficient and convenient way - there are distribution centers.
We offer a large selection of distressed houses for sale, including pre foreclosures, foreclosures at auction and bank owned properties located in all 50 US states. You will have easy access to all relevant information pertaining to these homes with just a few clicks in your computer. Finding the best deal on a distressed property which meets your budget and preferences will always be hassle-free.
Is there a specific type of distressed properties which is more profitable to invest in?
You will be pleased to know that despite the many types of distressed properties, all of them promise to be profitable. Your choice will simply have to depend on your resources and needs. Since each type of distressed home offers their own advantages, you have to determine which type you are comfortable of buying and eventually owning.
Are distressed homes always sold as is?
In general, distressed properties are sold as is. For this reason, you have to conduct a thorough inspection of the property to see the extent of repair work needed. Hiring a professional inspector is strongly recommended. In few cases, the seller will agree to agree to shoulder the repair cost as long as they are minimal. It is really a matter of knowing exactly what you are buying and negotiating with the seller.
What Are Handyman Specials?
Distressed properties which require extensive repair are usually referred to as Handyman Specials. They are usually sold at very low prices since the buyer will have to spend much on repair and renovation. It is important you know exactly how much it would cost you to have the property fixed up to estimate your potential profit. You can do so by working with an experienced and professional contractor.
What are Fixer Upper Homes?
These distressed properties - as their name suggest - requires fixing up. Investors consider these properties as the perfect choice for flipping since they can be bought for a fraction of their market values. Obviously, you will have to order a thorough home inspection to determine how much it will cost you to repair the property. Once they have been repaired and renovated, they can be sold for considerable profit, which is why many real estate investors consider them gold mines.
What do I need to get started with distressed homes investing?
To get you started on your distressed homes investing, you will need to educate yourself about everything there is to know about properties in distress from buying to cashing in on your investment. Of course, you have to understand your success will be greatly dependent on finding the best deals.
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Closely Related Topics: Not Sure If You Can Sell Your Home?
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