Distressed Homes | Foreclosures | REO’s | Short Sales in Round Rock TX
Distressed homes, foreclosures, REO’s, and short sales in Round Rock, Texas with drastically reduced prices are usually on the market because the homeowners are hoping to avoid a foreclosure or because the property has already undergone foreclosure.
The prices may be attractive, but it’s important to understand what you are buying. The first and most important warning is that a foreclosure or a short sale will nearly always be sold “as-is.” The owners, whether it’s a bank or the residents, won’t be fixing anything before or after the sale.
Advantages of Buying a Distressed Property in Round Rock TX
Price is typically the main benefit of buying a distressed property. In many cases, the sellers facing a foreclosure or short sale are racing against the clock and will price the property below market value. They often can’t or won’t be able to spend the money to repair a property in order to bring a higher price. It’s important to have a licensed Realtor® who can provide an accurate, professional opinion of the home’s value.
If you want to become a homeowner or invest in real estate, a foreclosure can be a good place to start if you know what you’re doing. An experienced distressed properties Realtor® can guide you through the purchase.
When mortgage rates are low, you can take advantage of inexpensive financing to buy a bargain and then sell it later for a profit.
Disadvantages of Buying a Distressed Property in Round Rock TX
The “as is” condition of a distressed homes is typically the biggest risk. This risk is the reason the property is set at a low price, and a potential buyer must be ready to accept and mitigate this risk.
Distressed home buyers will need to set aside money to hire contractors or to pay for materials to improve a house that is in bad condition. Some short sales and foreclosures are in good shape, but others are missing appliances, damaged walls, and may need major electrical or plumbing repairs. Sometimes, distressed properties will be open for professional inspection and sometimes you can only see the property from outside.
Distressed properties can have trouble meeting lender requirements, given the property’s condition. You will need an appraisal, and for many loan products the lender will need to assess whether the property is habitable and has value.
Tips for Buying Distressed Property in Round Rock TX
Buying a distressed property in bad condition may still be a good deal if you have experience fixing up homes or have network of trustworthy contractors you can hire, You should definitely work with a Realtor® and a home inspector who can give you a good sense of what it will cost to bring the home into good condition.
Many investors purchase distressed homes with cash, so you should prepared for potential competition from cash buyers. If you don’t have the cash yourself, you can work with a lender to secure a strong loan pre-qualification. To be an even stronger bidder, you may want to increase the size of your down payment or your earnest money deposit.
In some cases, a distressed property will require complex paperwork – like clearing liens and other encumbrances – before you can take possession of the property, so be patient.
Most importantly, educate yourself and work with professionals who can recognize the value in distressed property in Round Rock TX so that you don’t find yourself owning a distressed property that requires too much work or sits in a location that negatively affects its long-term value.