What are the differences in buying a distressed property compared to another home?

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I am on the house market looking to buy with a 10 or 20% down payment. What advantages are there to going after a distressed property, and what disadvantages are there?

If my definition is correct a distressed property just means it has been foreclosed, right?

2 comments to What are the differences in buying a distressed property compared to another home?

  • Oldmansea  says:

    A foreclosure sometimes has defects and there really isn’t a seller, other than the bank and you can’t go after them for any defects you don’t find right away. Get a qualified home inspection to insure the property is all it can be. You don’t want to find out later that the home has mold or some defect that you can’t live with and can’t sell, what a loss that would be.
    The advantage to buying a foreclosure is that it is money you don’t have to put in at the time of the sale and it will bounce back and give you a return when the economy picks back up. You can use this windfall to help you buy your next home and increase the value of your next property with more space as your family grows.

  • rswpbc  says:

    Advantages in buying distressed property is you can get a really good deal if you are careful and know what you are looking at. Disadvantages are a property that has several problems (lenders don’t always know if there is something wrong), lenders are not required to fix anything that is wrong and you may end up with a money pit……..

    Distressed does not always mean foreclosed!

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