When you are selling a distressed property for a client, you are under a lot of pressure. Your seller is usually desperate to sell the home as soon as possible because of impending foreclosure. In many cases, the house may be in poor condition, which may make it more difficult to sell it quickly. Here are three things to know when you are selling a distressed property.
1. Be Supportive of the Seller
Your sellers are often between a rock and a hard place and under a lot of stress. They are trying to avoid foreclosure, which will further destroy their credit. Having a bank trying to repossess their home can be extremely painful, as there is the additional worry about how they can afford to move their family to a new residence. You can help make this process smoother by helping them get the best price for their property. Don’t pressure them to accept low-ball offers from deal hunters. And never let the buyer know how desperate your client is when selling a distressed property because that gives the buyer the upper hand.
2. Know Your Customer
Make sure that you are marketing the house to the right buyer. Short sales can go through quickly or be drawn out. When the home is priced low, it may be attractive to first-time buyers, but they must have immediate funding for escrow as well as sufficient funds to close by the bank’s designated closing date. Banks often balk at granting extensions when selling a distressed property.
A drawn-out sale can present a problem for a buyer who needs to be able to move into the house sooner rather than later. For example, if you have a potential buyer who is at the end of a rental lease, he or she might be better off looking at homes that are not bound by the complexities of a short sale. A house that requires extensive repairs in order to earn a certificate of occupancy can present further complications.
3. Talk to the Banks
Banks would rather recoup their money through a sale than a foreclosure. Therefore, try to get the bank to work with you and your sellers if they are unable to afford their mortgage payments. It benefits both parties.
If you’re interested in dealing with distressed properties, it helps to make friends with the big lenders. They often want to move distressed properties quickly and may be willing to list some, if not all, with you if they trust you. It is a good idea to have credentials such as Certified Distressed Property Expert or Certified Short Sale Agent.