Buying Distressed Properties

More than a few real estate gurus promote the purchase of distressed properties. In a normal market, this represents about 10 percent of the properties on the market. Currently, we are in a strong buyer’s market so the numbers are a bit higher. That being said, you should be very wary about buying distressed properties at the moment. Why? Well, the distress is usually found not in the property, but in the loan. Simply put, the loan is heavily overvalued compared to the real assessable value of the property. While you might get a break on the short sale of the home, it is vital to recognize that the value of the home may keep dropping. If you end up upside down on it, you will be the one who is distressed!