Distressed real estate will always be a part of the market. Foreclosure is the general term used when speaking about a property that has landed in default. There are different types of property in default, some are known as Short Sales, some are termed HUD Houses, REO, or Auction properties. There are differences to each.
These properties are more difficult to purchase compared to non-distressed, well maintained houses, but if the value is well below retail market value and the Buyer has the ability to do repairs then "Foreclosures" can make sense. Most of the time the biggest issue is not getting the purchase money, its getting the repair money. That's why most of these properties are snapped up by CASH Investors.
Mortgage money availability varies depending on condition. If the Buyer is an owner occupant the most common forms of purchase and repair money is by FHA 203k or Fannie Mae Home-Path financing. Beyond those, not many other options.
Joe Wiessner Realty has relationships with Lenders that have alternate financing for these types of distressed homes. As usual the first step would be for Buyers to get pre-qualified for the loan. In some cases this special financing extends to Investors as well as Owner Occupants.
The degree of disrepair varies wildly from property to property. Properties that have public water, public sewer, and natural gas are typically easier to deal with, these are almost always sold "as is" subject to inspections. The usual problem is that the inspections are due to be completed within 7 days after contracts are executed. Failure to deliver the inspection results to the Seller in a timely fashion jeopardizes the opportunity to cancel the deal if unknown significant issues are revealed.
These Foreclosed properties are not for the faint of heart. The most important thing to do is hire a Realtor who has experience in dealing with distressed homes. They will know how to navigate properly and steer you clear of everyone's major fear, "THE MONEY PIT."
Joe Wiessner Realty has sold 100's of these distressed properties. Contact us today! 609-561-1010