What is a Distress Sale?
A distressed property is a property that has a financial burden attached to it. It might also mean a run-down property in need of serious repairs. Distress properties, properties where the owners are unable to make the mortgage payments, end up in foreclosure. What is a Foreclosure? Foreclosure is a process of legal action taken by a mortgage holder against a homeowner, when the terms of the contract are not met. Almost all foreclosures occur when the homeowner defaults on payment and cannot live up to the demands of the loan agreement. Why take foreclosure actions? The goal is to take over the possession of a property from the homeowner and sell it in the market to pay off the balance of the loan. Reasons for foreclosure actions Most of the reasons are common day situations that occur in our lives. The most important reasons for foreclosure actions are: • Job Loss • Divorce • Economy • Health • Death • Financial Mismanagement • Business loss • Interest Rates Opportunities in Distress
Distress sales involve the sale of assets that must take place due to conditions outside the control of the owner. With a distress sale, there is the need to sell the asset quickly, even if it has to be sold at a loss. The idea is to generate some type of return on the asset, even if it does not cover the current market value. One example of a distress sale in the securities market has to do with the issuance of a margin call. In the event that such a call is issued, the futures, stocks, or bonds associated with the call will have to be sold. They are highly unlikely to yield the return originally envisioned by the investor under these circumstances. A distress sale that many people can relate to involves real estate. In the event that personal finances undergo a downturn, home owners may no longer be able to make mortgage payments. In order to prevent foreclosure, the home owner will actively seek a buyer for the property that can either qualify to assume the mortgage, or buy the prop
Click here for your very own power of sale reports delivered to your mailbox… A distressed property is a property that has a financial burden attached to it. It might also mean a run-down property in need of serious repairs. Distress properties, properties where the owners are unable to make the mortgage payments, end up in foreclosure. What is a Foreclosure? Foreclosure is a process of legal action taken by a mortgage holder against a homeowner, when the terms of the contract are not met. Almost all foreclosures occur when the homeowner defaults on payment and cannot live up to the demands of the loan agreement. Why take foreclosure actions? The goal is to take over the possession of a property from the homeowner and sell it in the market to pay off the balance of the loan. Reasons for foreclosure actions Most of the reasons are common day situations that occur in our lives. The most important reasons for foreclosure actions are: • Job Loss • Divorce • Economy • Health • Death • Fin
A distress sale is one that requires approval from a homeowner’s mortgage provider(s) for a payoff smaller than the outstanding mortgage balance. These listings are commonly noted to require “third party approval”. No single source provides an accurate count of distress sales, so in mid-January we worked with our home search technology company to obtain counts of all listings in Montgomery County that have descriptions that likely indicate a distress sale or are bank-owned. These numbers will not be exact, but they are pretty close.
