Is a Distressed Property Right for You?

Like anyone else, Denver home buyers want to know that they're getting the best possible “deal” whenever they purchase something. The same idea applies to the purchase of real estate, which is why many buyers decide to go with what's known as a distressed property – a foreclosure or a short sale. Last week, the National Association of Realtors^® (NAR) released a report, discussed in the Keeping Current Matters blog, which showed that foreclosures are currently selling at a 22% discount, and short sales at a 17% discount.

This can sound like a dream come true! However, purchasers must be aware of a few added obstacles in any transaction involving a distressed property. For instance, foreclosed properties are often left in less than desirable condition, and some have title issues which must be corrected before the property can change hands. Also, short sales often have multiple loans that must be negotiated before an offer is accepted by all parties to the transaction. This can be a seriously time-consuming process.

So, should you bypass the purchase of a distressed property? Of course not! You just need to know that frequently, when purchasing a distressed property, you'll be faced with a “hidden” additional cost – the cost of your time. For many buyers, that 17 or 22 percent discount mentioned above is well worth the extra time spent on the transaction. Think of that savings as “patience equity.” If you realize from the outset that you're going to have to be patient with the process, you'll come out a winner in the end. And remember, being patient means that you'll need to have faith in your real estate professional; they'll need time to manage any obstacles and challenges.

If you want to reap significant savings – in addition to owning a home that has considerable equity the day you move in – you should seriously consider purchasing a distressed property whether it's a Denver foreclosure or a Denver short sale. Work with a Realtor^® who can explain the process at every step along the way. Marianne is a Certified Distressed Expert (CDPE), and has the knowledge and experience to help you through the process.

Contact Bandy Homes today. The Bandy Team can help answer your questions about our local market and show you some beautiful homes in the Denver metro area, including houses in Aurora, homes in Parker, and real estate in Castle Rock.