If you're in the market for a great chance to invest in quality real estate, buying distressed properties could be your best bet. These unique properties offer homebuyers and real estate investors a great opportunity to buy homes priced at below market values. While they aren't always easy to find, these sales more than pay for themselves once you know where to look.
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The term distressed property can refer to any number of different types of real estate. Generally speaking, it refers to real estate properties that have been scheduled for public sale by a lender, due to a default on payment of a mortgage loan by a previous homeowner. After a homeowner defaults, the lender will need to collect the outstanding debt somehow, and in many cases, that means selling the homeowner's property at auction. However, in most cases, the amount the lender will need to collect from the sale to settle the debt will be way below the actual value off the home. At most auctions, lenders will allow distressed homes for sale to be undersold, just as long as they gain enough back to satisfy the amount in debt. The potential for discount depends on a number of factors, including the amount of people bidding on it, but in general these homes can be bought for anywhere from 10 to 50% off its actual market value.
And all kinds of foreclosures go to auction in this manner, not just homes. You can often find commercial real estate properties and distressed multi family properties as well, so the options are wide open, no matter what you're looking for. Once you can find these for sale properties in your area or beyond and you know how to pursue them, the potential for savings and making great investments are incredible.
Finding and Buying Distressed Properties for Sale
While these discount properties aren't always publicly advertised, that doesn't mean they're impossible to find. Since it is generally lenders in charge of selling these homes, try to contact a variety of lending institutions in your area. Loans are available from banks, government agencies such as HUD, and private organizations such as Fannie Mae and Freddie Mac. Try cold calling the local branches of these sorts of institutions and asking how you can find out about distressed property sales.
Many buyers also turn to Multiple Listings Services (MLS) to help them locate properties. These are unique businesses which actually specialize in bringing members nationwide listings for tax distressed properties. If you're looking to cover a wide area for specialty property types, such as distressed commercial real estate, this is the way to go. Most of these services provide not only listings, but the important information you need to know to find the best deals and get the best prices. They also make it easy to find what you want quickly, so you can get a better jump on current sales. It's important to jump on these sorts of auctions quickly, because the faster you get involved, the more time and better chance you'll have for securing a deal.
ForeclosureDeals.com is a leading provider of foreclosure information and distressed real estate listings. We provide over one million listings for our members and a constantly expanding database of updates and new availabilities. Visit us today to get hands-on help from our expert team in buying a new home, business or investment property for a great price today.
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