What is Distress property?
Distressed properties are a unique type of real estate that often find themselves in legal or financial distress, making them challenging to sell on the open market. This distress is typically a result of the property owner’s ongoing foreclosure due to non-payment of loans.
In Massachusetts, distressed properties are sold at lower rates, giving investors a golden chance, but there is often a chance that the property might need repairing.
However, it is essential to analyze the property thoroughly to detect any risks before deciding to buy.
Types of distressed properties
In Massachusetts, distresses properties are of five types:
Foreclosure Properties
These properties are sealed by the financial institutions or banks due to the non-payment of the loan. Usually, such properties are auctioned at discounted prices.
Litigation-encumbered Properties
This kind of property usually involves property or inheritance disputes, such as ownership claims. This becomes difficult for buyers who are looking to find the authentic owner of the property.
Physically Distresses Properties
As the name indicates, these properties have structural issues requiring major expenditure for repairs, hence available at discounted prices.
Real Estate Owned Properties
Foreclosure properties which did not sell during the auction are now available as real estate-owned properties owned by the lender. Like other types this is also listed as a discounted price.
Short Sales
This type of property is usually sold at less amount than the remaining amount of mortgage. This is done to avoid foreclosure and listed for sale by mutual agreement with the lender for a lower price.
How to Sell a Distressed Property in Massachusetts?
House owners who cannot pay off their mortgage usually sell the property as a debt to pay the debt. The distressed properties are usually the result of divorce, foreclosure, or the requirement to relocate.
A short sale, a generic form of distressed sale, is a practical solution when faced with relocation. In this scenario, the property is sold at a lower price to pay off the remaining mortgage, allowing the homeowner to move on without waiting for the property value to increase.
Another situation is divorce, where the property needs to be liquidated and split.
Factors Effecting the Selling a Distressed Property for Cash in Massachusetts
Selling a distressed property for cash in Massachusetts involves multiple factors that can influence the sale procedure and outcome.
Market Situation
The market situation plays a vital role in the sale process of distressed properties. A solid market with huge demand can result in faster sales and decent prices, while a downward market may prolong the procedure and significantly lower the prices.
Property Condition
The structural damage and the repair requirement directly impact on its market value. Properties requiring extensive repairs may get lower prices or a competitive price to compensate for the renovations.
Location
The property’s location plays a significant role and directly affects its price. Propeties in the developing or desirable areas are likely to get more buyers offering competitive prices as compared to the other areas.
Financial and Legal Issues
Any ongoing financial and legal issues, such as unpaid taxes, non-payment of mortgage, liens, and unresolved disputes, can hinder the smoothness of the sales procedure. Resolving these issues is necessary to sell the property at a fair price.
Time Limitations
Any time limitations or deadlines for the sale process can influence the procedure. While urgency can acquire better offers, the chances of negotiation will be limited. Balancing the scarcity with a well-executed selling plan is essential.
Marketing Execution
Efficient marketing campaigns can significantly contribute to the sale of distressed properties. To harness attention, it is important to utilize multiple marketing platforms, highlight the property’s positive points, and target the right audience.
Not Getting the Value of Your Distressed Property? Check Out I Buy Places
Most of the time, distressed properties are unable to get fair offers, so out of frustration, house owners sell them at lower prices. However, this often causes burnout and loads of debt. To avoid such situations, distressed property owners can sell their houses to I Buy Places, which will give them the right offer after reviewing their properties.
Considerations For a Distressed Property
Before selecting a way to sell your distressed property, the houseowner should analyze multiple steps. Distressed properties must be sold much quicker than average properties; you must make specific considerations.
Buyers will try to gain an advantage from the situation. To avoid such scenarios, do a competitive analysis to get an actual idea of the prices. Get a quote from a realtor and set your expectations accordingly. This way, you will be able to get the actual value of the property.
Moreover, get a quote for the renovations as well to estimate your price range. This will make it easier to sell the distressed property without any discounted or even lower offers.
FAQs
Is Selling My Distressed Property to Cash Buyers a Good Idea?
Yes, selling distressed property for instant cash is an innovative idea. However, the downside is that you will not be able to determine the property’s market price.
Should I Know the Value of My Distressed Property?
The easiest way to redetermine the value of the distressed property is to get an estimate from a realtor.
How to evaluate the value of distress Property?
The value of the distress property will be lower than the current market rates. So, you can get the idea by getting the quote from a realtor.
What is the main purpose of utilizing distressed sales as comparable?
Appraisers can use the distressed properties as comparable when comparing the market value of normal properties.
How to find distress properties?
In Massachusetts, you can find the distressed properties under the umbrella of multiple listing services (MLS).