Should You Sell Distressed Property?
There are a number of compelling reasons to get involved in the business of selling distressed property, or at least not avoiding it. However, not everybody is cut out for it. Here are a number of reasons you might or might not be the right fit.
Do you like hustling?
You want to get distressed homes sold as quickly as possible. While other sellers may have the luxury of waiting weeks, months or even years until they fetch a good offer, people who are under threat of foreclosure need to get the home off their hands immediately. As a result, the business of distressed properties is much more about getting in touch with any potential buyer who will give you a reasonable offer.
Can you work effectively in sad situations?
Selling distressed properties is kind of like being a doctor. You are performing an important service, but you are also witnessing a lot of sad situations in the process. In many cases, you will be helping sellers who are being forced to sell their home due to an unexpected financial problem, such as loss of employment or a medical crisis. While you may be helping them tremendously by helping them sell their home, you can’t expect the sale to be a joyous event as it typically is with conventional sellers.
Do you like dealing with banks?
A big part of effectively selling distressed property is being able to communicate with the mortgage lender. If the seller has been struggling to make mortgage payments and the bank is close to foreclosing on the property, you may be able to negotiate some extra time to sell the house.
Do you like dealing with investors?
In many markets, investors looking for a big ROI are going to be the most likely buyers of distressed homes. The best way to quickly get a property sold is to tap into a broad network of investor buyers interested in flipping it. In some instances you may be selling a property that cannot be appraised because of its poor living condition, in which case those who can pay with cash are the only likely buyers.
You can’t ask for repairs
If your specialty is getting homes ready for market with renovations, repairs and home staging that will attract better offers, the distressed market is not for you. The sellers of homes under the threat of foreclosure are not in a position to make the fixes –– big or small –– that you may be used to recommending for sellers trying to reel in the big bucks.
In fact, with distressed properties, instead of highlighting the home’s recent renovations to prospective buyers, you will often be pointing out to investor clients the potential repairs that they could make to increase their ROI. It’s a very different ballgame!