No doubt about it, great real estate bargains are out there these days – but there’s more to cutting the best deal on a distressed home than meets the eye – and the pocketbook. With one-third of all home sales coming from the foreclosed property market, it’s time to get smart about getting the best deals.
First, let’s study the pros and cons before you even consider getting involved in a distressed property deal.
Cost. On the sell side, anyone involved with a foreclosed property just wants to cut their losses. That means homeowners and lenders, specifically. So you’ll likely have leverage to go low when buying a distressed property.
Volume. It’s a supply and demand world, and foreclosed homebuyers are living large in it. Besides the millions of foreclosures already on the market, there are more – lots more – on the way. According to Amherst Securities Group LP, more than 7 million homes that are on the way to foreclosure will hit the real estate market soon. The “huge shadow inventory” as Amherst calls it, will ensure that the glut of distressed homes on the market will only grow more abundant – thus bringing prices down even further.
Cheap labor. Even if you buy one of those “unique fixer uppers” on the market, you’ll likely save money on contracting help and home maintenance supplies, given the weakened state of the economy.