The best news for buyers is when a property appears on a listing below the market rates. Known as distressed properties, these offer an attractive proposition to buyers and investors depending on the sale conditions.
While the housing market is only gradually increasing, 2023 is expected to see at least a 2.8% rise in the prices. Distressed properties thus pose a fortunate interval for buyers to benefit from the generous discount. Here are seven cases when the owner could be most motivated to sell the property
1. Financial Constraints
The most common cause for a property to be listed under market value is financial difficulty. The owner might not be able to afford the mortgage payments or other expenses or needs to raise cash immediately for other concerns. Either way, the owner would be eager to sell the property as soon as possible and would be willing to accept a discounted offer. Buyers should remember about other expenses that come with owning a home. Learn more about mortgage payments and expenses that come along here.
2. Property Deterioration
If the condition of the property is not favorable, then it often warrants the property investors a favorable sale. Some properties might also be left incomplete half-way through renovation or construction, and in dire need of repairs to make it habitable. Buyers who are willing to cover these expenses can buy it for a much-reduced rate.
3. Property Dispute
Property under joint ownership might be listed as distressed if there has been a partnership dispute between the owners. In such scenarios, both or one of the parties might be keen to get rid of the property and to end the partnership welcoming below-market rates from investors.
When owners fail to pay the mortgages, banks often foreclose them, only to put them on sale or auction. The price might still be lower than the market value, and buyers might be able to pull off a deal at a considerable discount. There is a necessity of caution in this case, as most of these properties might have been abandoned and need extensive renovations.
Millennials with families are relocating to suburbs and are eager to dispose of their city properties. Not only the younger generation, anyone who is contemplating a job relocation might be willing to let go of their current residence to avoid paying the mortgage as early as they can. This, undoubtedly, presents an agreeable gap for a buyer to put down a lower price, which the sellers might not have accepted otherwise. And the increasingly popular way to relocate is by utilizing a reverse mortgage for home purchase, a special type of purchase transaction that allows a senior age 62 or older to buy real estate using a reverse mortgage loan. The loan itself requires no monthly mortgage payments and the down payment is typically 50% allowing for you to conserve liquidity and cash flow without the requirement of making traditional mortgage payments. To get an idea of how much your reverse mortgage down payment is try the free HECM calculator courtesy of ReverseMortgagereviews.org her
If you are on the buyers’ side of the market, then someone’s fortune or misfortune could turn out to be your boon. All you need is an expert real estate agent found through a platform like UpNest to keep an eye out for such distressed properties and help you make an offer right away. For more information about it, make sure to check bbb.org
6. Personal Tragedy
Unforeseen situations or tragedies could be anything from a death in the family to an accident that requires the owners to dispose of their property and move to a more affordable place. On the other hand, if the owner has died and the rest of the family does not want to maintain the house, they would be wondering how to sell a house quickly and divide the money among the remaining family members.
Divorce is one of the common causes for a house to go on sale, and for new buyers to appear on the market. Selling a property is considered as a way to divide the assets, and thus, both parties would be eager to sell it without any delay to avoid further complications, at the price of a loss.