Looking for Distressed Properties For Sale?
Novice real state investors make the mistake of buying foreclosed properties at foreclosure auctions. Sure, they still cost less than their market prices; but if you really want to be successful in real estate investing, distressed houses for sale offer the best deals.
As you may know by now, real estate properties often enter different stages before being declared foreclosed. The stages include the preforeclosure, foreclosure at auction and post-foreclosure. When purchasing a foreclosed property at foreclosure auctions, the minimum bid already includes the foreclosure costs incurred by the mortgage holder. Meanwhile, foreclosed properties that survived the foreclosure auctions become real estate-owned or bank-owned and their prices could go up depending on the seller.
But preforeclosures, on the other hand, are usually referred to as distressed homes for sale. Owners will try to sell their homes before the re-instatement period expires. Because of the urgency, you can purchase distressed properties for sale at very low prices, sometimes with as much as 50% discount. Some investors simply pay the owner an amount equivalent to the equity they have and then assume the mortgage loan.
Looking for distressed properties is definitely challenging. You can search your local newspaper for legal notices or try to contact an employee of your local county. Another way is by getting the services of experienced real estate brokers like MostlyForeclosures.com. These realtors have wide network connections and you can rely on them to help you establish contact with owners of distressed properties for sale.
Once contact has been established, you and your broker can start talking about the selling price. You should find out how much the seller owes in mortgage loans as well as the equity they have. Legal fees and other closing costs should be discussed as well as re-instatement fees in case you want to assume the loan.
