Umatilla Florida Blog

    I get calls on a regular basis from customers wanting to buy a distressed property in order to get a "good deal". While acquiring one of these properties can certainly be advantageous from an economic standpoint, a party interested in making such a purchase must be aware that the process can be much more arduous than a normal sale.

    First, buyers must be aware that they must be financially qualified to even think about making a play for one of these properties. An all-cash offer is best because it removes the contingency/uncertainty of the buyer having to obtain financing for the purchase. All other factors being equal, an all-cash offer will always be much stronger than one in which the buyer must qualify for a mortgage.

    If a potential purchaser intends to finance the purchase with a mortgage, any offer being made on a distressed property must be accompanied by a pre-approval letter from a financial institution for the proposed mortgage amount. The mortgage holder of the distressed property being sold will also require proof of funds for the amount of the down payment. These types of offers will not even be accepted without these documents. Buyers must do their homework before even thinking about an offer. A Pre-Approval Letter and Proof of Funds are both absolutely necessary.

    Even if all of these preparations have been made and an offer has been submitted, these transactions can be agonizingly slow. The mortgage holders of distressed properties have hundreds if not thousands of similar properties to be worked. The loss mitigation and negotiation departments are under tremendous pressure and are extremely busy. It is not uncommon for 30 to 45 days to pass before an offer is even processed.

    These are difficult but potentially rewarding transactions. It is always best to work with a Realtor on any real estate purchase but especially one involving distressed property.