The economy is turmoil, and at the epicenter of the current financial maelstrom is the collapsing real estate market. The average home price has plummeted in recent years, with many areas seeing home values fall by as much as 30% and more. What’s more, economists predict that the market hasn’t reached bottom yet, and that home prices need to fall by as much as another 30% before prices stabilize. That’s a nightmare for homeowners, but a boon for buyers. Many distressed homes are in default, and that means the terms can be the buyer’s to dictate.
If you’re a homeowner in distress, you are more than likely in a situation where you can’t make your payments anymore – and you’re about to default. You need to be free of your financial obligation to your lender, and fast. You’re about as vulnerable as it gets, and let’s face it, there are many people out there who will take advantage of you without batting an eye. If you can hold on to your distressed home in default, you need to do everything you can to prevent losing it. If you’re a home buyer who is looking at distressed homes in default because you think it’s the perfect time to buy, you need to balance your desire for a good deal with your desire to treat other people fairly, and not cross over the line into exploitation of the vulnerable.
Problems with Distressed Homes
Buying and selling distressed homes in default can also have a lot of unforeseen financial complications. There can be liens you were never told about, for example, and there can be debt and foreclosure laws that will make selling distressed homes extraordinarily complicated.
Before you buy a distressed home in default, be sure to consult with a real estate professional (or professionals) and get their advice.