Foreclosure In the state of Virginia the foreclosure process will begin when an owner receives the “90 day notice of default” or in other terms the owner has missed three (3) consecutive mortgage payments. Forbearance Owners can forestall the process by declaring bankruptcy or enter into negotiations to obtain forbearance. It is difficult to receive forbearance once the foreclosure process has started and usually will only be granted with an offer to buy by a third party. Short Sale Owners have an additional option to forestall the foreclosure process, the short selling of the property. Lenders will accept in lieu of foreclosure a short sale which is generally the preferred option. The lender will allow the property to be sold for less than what is owed on the mortgage with several possible outcomes. A Must Read Article Short Sale FAQ's Regardless of the choices made. It is recommended sellers meet with a tax professional to discuss options. It would also be advisable to speak with an attorney who specializes in this field. Distressed properties A property that is defined as distressed is either a function of condition, ownership in default, or both. Most properties on the market today (2007-2008) are distressed due to default which results in property condition problems. When an owner is financially stressed, all maintenance is deferred and the property begins to suffer from “wasting”. Many of these properties on the market today not only suffer from wasting but also for several forms of obsolescence. As the market shifted towards the buyers market in 2005/2006 many investors were caught in the late stage of the boom and were not able to acquire and renovate aging homes effectively. Leaving many unfinished renovations which often just sat for months or were rented out in desperation. The flip quickly became a financial burden for some investors. Many flips also were new homes in the growing XBURBS which now sit on the market for a short period of time due to the new demand for affordable housing. It is a real challenge to buy these homes due the fact most of them are quickly identified for the opertunity.
Buying Distressed Properties Buying distressed property can be quite rewarding but MUST be approached with caution. It is easy to be caught up in the process with out realizing the pitfalls, so if interested in learning more please contact me directly. |