Tips for Buying Distressed Properties In Southwest Florida
In the years following the housing crisis that began in 2008, the inventory of distressed properties in Southwest Florida was high. While we have successfully recovered from the downturn and are now enjoying a healthy real estate market again, the reabsorption of those distressed properties was necessary to get here.
Neighbors may grumble when a distressed property comes on the market for fear of how it will affect their own home’s value, but the truth is that it is better for the property to be purchased as quickly as possible, versus sitting abandoned and further declining in value.
For buyers and investors interested in purchasing a distressed property to “get a good deal,” it’s important to understand the nuances of the market, because it is very different from a traditional home sale.
Tips for Buying Distressed Properties
1) Be Patient. The home buying process can be drawn out on a good day; buying a foreclosure or short sale adds another layer of legality that must be met.
2) Be Open. If you’re set on buying a distressed property because of the savings, you’ll need to have an open mind and understand you might not be able to find exactly what you had your heart set on.
3) Be Smart. Work with a real estate agent with experience in distressed properties. They will better understand the process, what to expect, and what potential issues could come up.
4) Be Aware. Short sales and foreclosures are sold “as is.” There is no warranty, there are no concessions. You cannot ask the bank to fix a leaky roof or broken window. You buy it, you fix it.
5) Be Qualified. Keep in mind that you’re negotiating with a bank and that their biggest priority is recovering as much of the loan amount as possible. They will be less attracted to a buyer without enough earnest money, with poor credit, or who is trying to buy the property with a risky mortgage.
6) Be Prepared. Distressed properties may have been abandoned, previous homeowners may have caused damage, or there may have even been squatters or vandals in the interim. Prepare to get your hands dirty and put some money into fixing up a property that hasn’t been taken care of.
The Link Team can Help You Buy Distressed Properties
While there are far fewer short sales and foreclosures on the SWFL real estate market today, the unfortunate reality is that there will always be scenarios where people can no longer pay their mortgage and are forced to walk away or negotiate with the bank.
When this happens, it is in the bank’s and neighbors’ best interest to get the home sold to a qualified buyer as quickly as possible to avoid further declining values. This is part of what makes distressed properties such a great deal, particularly for young and first-time buyers who might not have been able to afford an area otherwise.