Distressed properties are sold in Houston below their market price. This is because the owners of the properties cannot afford the financial needs of the property, so they must sell the property quickly. You can find many types of properties in this situation in the market, from single-family homes, apartments to multi-family units and commercial properties. Since they are all sold below market value, this represents an excellent opportunity for buyers. If they invest long-term, they will buy below market value and sell at a higher value.
What Is a Distressed Property?
Distressed property in Houston is a type of property sold through an impending foreclosure process or repossessed by the creditor. There are many types of distressed properties in Houston, usually depending on what stage of the foreclosure process the property is in. For instance, there are distressed properties for sale by owners who have recently defaulted on mortgage payments and are looking to sell before falling further behind. Likewise, there are distressed properties scheduled for public auction by lenders or local courts as the last step in the foreclosure process after several months of duration. But what all of these properties have in common: they sell at a low price and are an excellent option for those looking to make real estate investments.
Distressed property in Houston can be sold at a discount of 30%, 45%, or even up to 60% of the value they possess, making them an incredible opportunity for buyers and investors. However, this represents a loss of money for the property owner.
Get Your Distressed Home Valued
Preventing a distressed home from being sold at auction allows the seller to have more control over the price it will sell to offer their home at a price close to its actual value. Selling a distressed property in Houston is an excellent way to lose money selling a house.
Anyone can sell their property even if they have not finished paying the mortgage loan. There is no problem since this does not influence the sale value, the terms of the dividends, and the operation time. What is important is that, in the transaction, the creditor financial entity is guaranteed the payment of the outstanding debt.
In this sense, the new sale and purchase value must be higher than the amount owed. Of course, if a considerable time has passed since the first purchase, the chances are that the property has gained some equity that facilitates the transaction.
After a homeowner default on his mortgage payments, the lender will first send a Notice of Default, informing him of the amount due and giving him a certain period to pay. If the homeowner fails to pay by that date, a distressed sale will be scheduled for their property. Thus, the notice of default marks the beginning of the pre-foreclosure period.
The property owner can stop foreclosure at any time before the sale date by paying the entire amount due on loan, which is why homeowners choose to sell their distressed properties on their own. This allows them to avoid foreclosure, which could have a very significant long-term effect on their credit. But, since the property owner only has to pay the remaining debt on the loan and not the total amount.
It is noted that if the homeowner does not hold the property sale before the scheduled foreclosure sale date, the property will be sold at a public auction by the lender or someone they trust.
Foreclosure auctions or distressed home auctions are the most common way buyers get foreclosure properties for sale. These auctions happen all the time all over the country and are one of the most straightforward ways to buy real estate of any kind. All you have to do is show up on the day of the auction and be ready to bid, and you’re done.
Of course, there is a great deal of preparation for buying homes for low prices at a foreclosure auction. The auction process is very different from a typical real estate sale. You will not have to negotiate with an agent, and you will receive a bill of sale as soon as the auction is over. As mentioned, homes at foreclosure auctions are sold below market value; the discounts will be higher than you can find anywhere else, so it is not convenient for sellers.
Should I renovate a house before selling?
If you want to increase the value of your house in Houston before selling it, you should make all the necessary renovations and changes.
1. General repairs
Go through the whole house and fix any breakdowns that may be present:
– Doors and windows.
You have to be attentive to any detail, so fixing this breakdown is essential before making visits.
If you have faults without fixing, you give the people who visit your house the opportunity to negotiate the price. It is more difficult for them to decide to purchase because it increases the budget if they fix these flaws themselves.
2. Distribution of the house
This aspect depends mainly on the interior decoration trends and the taste of the future owner, but the distribution of the house is crucial.
Spacious and clean spaces are much more attractive. They give a feeling of spaciousness and make the house look more prominent.
The living room must be a bright area, that the bathrooms are close to the bedrooms or that the kitchen is close to the living room.
Remember that people are looking for comfort and functionality.
3. Check the paint
One of the most critical changes that you can make is checking the walls. First, check the state of the paint, and if they are worn or look bad, invest in them.
The condition of the walls is critical to make an excellent impression on potential future owners and increase the house’s value.
In addition, you can take advantage of this chance to play with different shades of paint: bring warmth, relax or create an effect of spaciousness with different colors.
4. Renovate the kitchen and bathrooms
The kitchen and the bathroom are two of the rooms that deteriorate the most over time.
They get a lot of use, and it is essential that when you put your house on the market, they look well cared for, and the accessories are in perfect condition.
It is not necessary to do a complete renovation in these rooms. You can change the furniture, appliances, plumbing, faucets, etc.
You do not have to make a significant investment in this change with designer furniture and accessories. However, it would be best to choose classic and neutral models that suit all tastes and styles.
Why is buying a house for cash the best option for selling a distressed home?
When selling a house for cash, the sale can be completed in just seven days. The average person selling a distressed property does not have the time or capital to do it right. This way, in one week, you can sell your property and avoid defaulting on your payment or having your house auctioned off. Selling a distressed property in Houston will prevent you from selling your home at a considerable markdown.
Likewise, most cash buyers are people looking to make a profit. They will buy your house, as is, and then make those changes and repairs themselves. When a buyer purchases in cash and repairs themselves, it allows for greater flexibility and ease of management.
Likewise, with a cash sale, you can approach the buyer months in advance, schedule a specific date, or even push for an aggressive two- or three-week timeline. This way, the sale is on your terms.