Is a distressed property right for you?

As a buyer it’s important for you to remember that Foreclosure is a process, with buying opportunities at each stage:

Stage 1. PRE-FORECLOSURE – A period of time that begins with the initial mortgage default and ends when the distressed property is sold.

Stage 2. PRE-FORECLOSURE SALE – When the property is auctioned to the highest bidder, someone who also meets the terms of the sale.

Stage 3. REO (REAL ESTATE OWNED) – If a foreclosure sale is not successful, property ownership is transferred to the lender.


This is a situation in which a seller owes more on their loan than a sale of the property will produce, and they are unable or unwilling to make up the difference at closing. The seller may or may not be in pre-foreclosure. Banks may consider a short sale to a new buyer to reduce their losses.


As a buyer’s representative I can give you specific guidance based on your situation and the type of distressed property you want to purchase. But for starters, consider these questions:

  • Are you flexible on timing? Can you make a quick decision and/or accommodate months of possible delays?

  • Is your purchase limited by any contingencies, such as needing to sell your current home first?

  • Have you already secured financing?

  • Do you have resources to repair and rehab the property if needed?

  • If you are buying the property for investment purposes, what is your action plan? Do you intend to rent or resell? Or perhaps inhabit the property until market conditions improve?


As a buyer’s representative I can assist you further in answering these and other questions which will help you determine whether this path to homeownership is right for you. Call me today to set a time to discuss your real estate needs.