Home buyers can score savings by considering the types of distressed properties for sale in Reston. Don’t be fooled by the word “distressed” because they are not all run down. Many are in good condition and provide an excellent opportunity to snag a home below market value. Learn about the different types of distressed properties and see if any of them makes sense for you.
Types of Distressed Properties
- A Short Sale occurs when the home sells for less than what is owed on the mortgage. The homeowner can no longer pay for the loan but the lender wants payment. So they sell the home for whatever they can get. The lender would rather have proceeds from the sales transaction than taking chances with the original homeowner. In many cases, the home value is above the purchase price.
- A foreclosed home belongs to the bank. The homeowner either abandons the home or deeds it to the bank voluntarily. The lender legally owns the home and the borrower forfeits all rights to the property. The bank will sell the home to recuperate what they can from the loan.
- Sheriff Sales are auctions where buyers can bid on foreclosed properties. At this point, homes are repossessed by the lender and they want to sell the properties quickly. The general public is welcome to make an offer and the highest bidder will have the opportunity to pay for the property and take ownership of the home.
- Real estate owned property (REO) is property a lender owns after an unsuccessful sale at auction or foreclosure. By now, the lender has had the property for a while and went through failed attempts to sell the home. They just want to sell the property to minimize their maintenance cost.
WHY YOU SHOULD BUY A DISTRESSED PROPERTY
The biggest advantage is price. You are more likely to find a bargain because you will be buying from highly motivated sellers. Distressed properties also have the potential for better financing and have a higher investment value. If you buy at a low price, then make repairs and upgrades, you can flip your distressed property and enjoy a high return on your investment.
WHY YOU SHOULD NOT BUY A DISTRESS PROPERTY
Distressed properties don’t settle as quickly and easily as traditional home sales. There is usually a lot of paperwork and the process can be lengthy. Most importantly, these properties usually sell “as is.” Although you will save money on the purchase, you may need to spend a lot for maintenance, repairs, and upgrades. Additionally, low prices cause high competition. There might be several buyers interested in the property you want, which will drive the price up. It also might prevent you from obtaining a house you have your heart set on.
NEXT STEPS
Your realtor will be your best guide when considering the different types of distressed properties in Reston. But you can start with a little research yourself. Check out our distressed properties listings. You can also look at Zillow’s listings and other listings online. Take some time to see what is available. Do your research and talk to your realtor. You just might find your dream house at a great price! There is a lot of information to process, so if you have questions or need help, contact me.