Selling a distressed property can be a challenge for first-time sellers. Many important aspects of the real estate market are involved throughout the process and can be difficult to navigate for those that want to sell their house fast.
What is a Distressed Property?
A distressed property is a property that must be sold after being seized by lenders or in poor conditions. This mainly occurs when an incident occurs where owners feel forced to condemn the house or when financial institutions confiscate the property from failure to pay.
There are different types of distressed properties depending on the selling conditions and current owner. Foreclosures, the most common type, happen when the homeowner fails to make multiple mortgage payments & the lender has already received a notice of default. REOs, or real estate-owned properties, are those that are owned by financial institutions that could not be sold at auctions.
The following are the steps one should take when getting ready to sell a distressed property:
Find Out What’s Wrong
Properties become distressed for a reason. Whether it is from seizure, death of the owner, hoarding, or even drugs, it is important that the reasoning for the distress is clear to potential buyers. These issues determine the kind of treatment required to return the property to selling condition so the owner can sell their house.
After knowing the reason why the property is distressed, it needs to be thoroughly cleaned. Hiring professional cleaning crews is a worthwhile investment in this case, as they have the qualifications to properly clean up materials that force the property to be condemned, such as biohazardous materials, dead bodies, or volatile substances.
Arrangements for working with distressed properties must be made as soon as possible, as the longer, it takes to maintain the property, the more time and money are required to have it completed. Under-the-table deals should be avoided at all costs, as those are not usually insured and can incur life-threatening risks from handling hazardous materials.
Get an Appraisal
After the property has been cleaned, it’s time to find a realtor or appraisal expert to give the property an accurate purchase value. It is important, to be honest with them about the property and report any hazards or incidents that led to it being distressed. If a distressed property is valued too highly, potential buyers would be scared off because they might not be able to afford it. If the valuation is too low, then buyers might be too concerned about what is wrong with the property and not offer to buy.
There are many ways to be able to purchase and sell distressed properties, both from banks and from current owners.
The first potential option is to sell at an auction, where the house is sold in its current condition. This option invites many variables, including low attendance and low bids. If work is put in to hire professionals to clean the property, then there is leeway for higher asking prices.
The second method for selling a distressed property is to do a short sale. If the current owner still owes money, they can sell the house for lower than it is valued and pay the lender the difference over time. This option is favorable for individuals who would prefer to spend less time in the process of buying distressed properties.
A third option is to work with a professional home buyer like Fast Home Offer Utah. Fast Home Offer Utah works to teach people about selling their homes and distressed properties and offer cash for their homes. They take charge of the clean-up process by hiring professional cleaning crews and work with clients’ schedules to deliver fast successful experiences. For more information on selling distressed properties, call 801-648-7942 or email Fast Home Offer Utah to get the best experience near you.