If you look back at the last 10 years, you will witness that the housing market in the US has been in a serious state of flux. It was in 2008 that the housing market saw the largest pricing drop in history. This helped kick-start The Great Recession, not only in the United States but all over the world.

The meteoric rise and subsequent free-fall of housing prices led to a rise in Distress Property. There are untold numbers of houses and commercial properties that are suffering from dilapidation as the homeowner is not able to afford the upkeep. Also, homes that are on the edge of foreclosure, due to delinquent payments, can also be considered distressed properties.

However, you can still make money while selling distressed properties. Here, we have compiled five tips on how you can get the most out of your unused real estate. Let’s take a look at them.

How to sell a Distressed Property?

Selling a Distress Property has its own logistics and there are certain things that you need to keep in mind. The five guidelines mentioned below will help you get the best deal for your distressed property.
But, what do we actually mean by the terminology “Distressed Property”? Below lies the answer.

Distressed Property-What is it?

We call a property distressed when its owner is unable to keep up with the financial obligations of the ownership. This could be due to the inability to upkeep the property according to safety standards or defaulting on payments.

The most common types of Distress include:

  • Foreclosure
  • Tax Liens
  • Preforeclosure
  • Poor Conditions
  • Probate Sale
  • Bankruptcy
  • Divorce
  • Death in the family

These are some of the facts which mean that property owners need to sell in a hurry.
Here, we have mentioned some tips that will help you get the most out of your distressed property.

Tip#1: Fix-Up Distressed Home before Appraisal

An appraisal is generally involved while buying or selling a property. This is something that will set the property value for both parties.

There may be situations where the property might not meet the criteria for an appraisal. Things such as extensive water damage or exposed floorboards could disqualify a property and would call for a remodel before it becomes eligible for appraisal.

However, there are certain renovations that can be prohibitively expensive. If you are anticipating that the repairs will take a sizeable amount of pocket payment, then we suggest that it is better to lower the ticket price or sell your home “as is.”

Tip#2: Sell for Cash

If your home is not eligible for appraisal, then no lender will be able to finance the transaction. What that means is that even interested buyers will not be able to purchase your property unless they have cash in hand.

Investment groups can be a solution to this dilemma. These are people who are on the lookout for bargain real estate to fix up and sell for a profit.

Alternatively, you also have the option of setting up the sale like a land contract. Here, the buyer makes a small down payment, and then makes monthly installments, which is similar to a mortgage.

Tip#3: Be Ready to Get Dirty

Are you looking to get the best deal on your Distress Property? But, if you don’t want to pay a fortune in expenses, you need to tackle some of the dirty work yourself. You can undertake basic home repairs by DIY home repair enthusiasts. You can also deep clean your home and also tackle certain design renovations as that will make your property more appealing.

Tip#4: Avoid Delays

If you decide to sell a property through traditional methods and channels, then that will take months, if not years. And most people who are looking to sell a Distress Property don’t have the luxury of time. Once mortgage payments have been defaulted on, it marks the beginning of the countdown toward foreclosure.

Another disadvantage that comes with selling delays is the likelihood of damage being incurred. If you are not occupying your distressed property, then there are unofficial tenants who may take up the residence. And you will be responsible for the damage that will be created by the squatters. There are also chances that you may end up getting fined for owning a property that is not up to the safety code. Thus, by owning an unoccupied house, you are losing money as well.

Tip#5: Verify Buyers

You will be working with someone who will be purchasing your property out of pocket. Therefore, it becomes extremely important to ascertain that they are actually able to pay. You can also ask them for some form of financial verification. And if you are working out a land contract, you can also ask for some proof of income. As this is something that will ensure they will be able to make ongoing monthly payments as well.

Final Take

Follow these tips while you sell a Distress Property and get the most out of it.