Distressed homes for sale are definitely cheap when compared with regular and brand new dwellings. But there are things that home buyers might not find out about these properties until they have already made the purchase and are already suffering from emotional stress brought about by these hidden troubles.
Unpaid Mortgages and Undisclosed Defects
Buyers of a distressed property will always face the possibility of taking over previous owners' troubles. A number of home buyers have reported purchasing such homes only to find out that another mortgage has been left unpaid by the previous owner. Most of the time, the responsibility of paying for these unpaid debts are given to the current owners of the property who are unable to back out of the transaction, particularly if they already put down part of the purchase price for the house.
Another danger of purchasing distressed homes for sale is high repair costs. Since banks who sell distressed and foreclosed homes are usually not bound by any defect disclosure rule like traditional home sellers are, they do not find it necessary to inform buyers of the true extent of the home's defects. Some buyers would only find out once they are already occupying the home and suffering from dripping roofs and mold-eaten walls.
Competing Against Bigger Opponents
The process of buying foreclosed and distressed dwellings is not easy. For a private home buyer, particularly those who are first time buyers, the greatest competition comes from the side of real estate investors. While private buyers wait for banks and lenders to approve their mortgage applications, big time investors position themselves to take the best priced and top conditioned homes in the market with their big financing and strong market contacts.
People who plan on buying distressed homes for sale should prepare for the battle ahead and should learn the ins and outs of the foreclosure market as much as they can. Seeking the advice of people who have already gone the foreclosure route will help, but getting the opinion of a property agent and a real estate lawyer is still the best option.