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POWER OF SALE- DISTRESS SALE - BANK FORECLOSURE
What is a Distress Sale?
A distressed property is a property that has a financial burden attached to it. It might also mean a run-down property in need of serious repairs. Distress properties, properties where the owners are unable to make the mortgage payments, end up in foreclosure.
What is a Foreclosure?
Foreclosure is a process of legal action taken by a mortgage holder against a homeowner, when the terms of the contract are not met. Almost all foreclosures occur when the homeowner defaults on payment and cannot live up to the demands of the loan agreement.
Why take foreclosure actions?
The goal is to take over the possession of a property from the homeowner and sell it in the market to pay off the balance of the loan.
Reasons for foreclosure actions
Most of the reasons are common day situations that occur in our lives. The most important reasons for foreclosure actions are:
- Job Loss
- Divorce
- Economy
- Health
- Death
- Financial Mismanagement
- Business loss
- Interest Rates
Opportunities in Distress sales
Buying real estate at market prices today is not the same investment opportunity as it used to be. The only way to benefit is to buy real estate ‘below market value’. Here are the reasons why:
- Lower Purchase Price
- Cost savings
- Price reductions
- Lower Down Payments
- The lower the price, the lower the down payment
- Get more for less
- With a lower down payment and monthly payment, you may be able to purchase a bigger home or cover other expenses you have
- Motivated sellers or lenders
- They do not want to keep the properties in their possession for too long
- Less Competition
- Many buyers are aware of foreclosure opportunities
- Better terms
- The buyer may receive better structured mortgages from the lender
NOTE: a real estate agent’s job is to get the best price for a property that is for sale. Therefore, they might not be willing to promote and deal with discounted opportunities, which conflicts with one of the directives.
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