Have you been thinking about purchasing a foreclosed home? It can be a great opportunity for some home buyers, not they’re not for everyone. I wanted to give a quick overview of distressed properties to help you decided if one of these homes in potentially for you.

What Are the Types of Distressed Homes?

Foreclosed - typically refers to a property that has been "foreclosed on." The bank/lender has gone through the legal process and has taken possession of the home. These are often referred to as REO (Real Estate Owned) or Bank-Owned properties.

Short Sale - a property being sold where the seller's proceeds aren't expected to pay off more than they owe. The seller then (potentially) works with their mortgage/lien holder to sell the property.

HUD Home - a house that has been foreclosed on by the United States Department of Housing & Urban Development (HUD).

Pre-foreclosure - a very confusion status. Foreclosure is a process which takes some time to complete. Sites like Zillow list homes as pre-foreclosure, when they receive ANY indication that the foreclosure might be starting. In many cases, the property owners don't even know their home showed online. It takes some time for the process to play out and for the house to move to the fully foreclosed status...if the property is going into foreclosure at all.

Is buying a distressed property for you?

I despised hearing certain phrases from my parents growing up...one of which was "It depends." So I don't like to say that phrase now, but when it comes to exploring the possibility of purchasing a foreclosure, truly, "it depends."

The best way for us t

o explore this option is to talk about your specific circumstances and various abilities. I have worked with multiple buyers to purchase distressed properties when their circumstances were right.

When we talk, here's the largest factors that will be helpful to review. Just because your situation may not be ideal in each of the factors below doesn't mean all distressed properties aren't for you - it will just help identify the properties that may be a good option for you.

• Timeline for your purchase

• Timeline for occupancy of the property

• Contingent Sale (Does another property need to be sold before the purchase?)

• Cash or Mortgage Purchase

• Available Mortgage Products (USDA, VA, FHA, Conventional, Renovation)

• Cash savings for necessary renovation

• Ability/interest in renovating yourself vs ability/interest in hiring pros

• Level of Risk Tolerance

• Level of Patience

• Responsiveness & Flexibility in schedule

If you think that a foreclosure is an option, let us know and we'll discussion the options available to you and review the properties that are available!