Distressed Properties

Distressed Properties

A distressed property is the term for a property that is under the order of a foreclosure or undergoing some similar proceeding. The mortgage on said property is not being fulfilled as it was intended. Having these distressed properties can be difficult to deal with if they impact as it will impact the overall value of the property.

Distressed properties can be lucrative from the eyes of the buyer. There are various issues to consider however, such as property taxes, needs for repair, and transaction costs that can all

impact the outcome of transactions concerning these types of properties. This is why utilizing the experience of others more experienced in the field is crucial.

Risks Associated With Distressed Properties

There are a variety of issues to keep in mind when dealing with distressed properties including but not limited to:

Delay - properties that are subject to foreclosure conditions carry with them lengthy processes and procedures. The more time it takes to overcome the processes and procedures the more impact it will have on the value of the property.

Miscalculating Value - there are also a variety of issues that can arise during the process of calculating the proper value of the property. . Not only could there be differences in appraisals, but there are also a variety of hidden costs such as taxes and liens which may be on the home. This could have a considerable amount of impact on its overall value. Furthermore, there could also be hidden repairs needed that could be central to the structure of the property and require a considerable amount of investment. These are a plethora of risks when dealing with distressed properties.

Improper Contracting - even if a property is free from issues when it comes to processes and value, there may also be issues associated with the contracting and delivery of this contracting which can be detrimental. Furthermore, this can cause a variety of costs and responsibilities placed on a property.

How To Deal With A Distressed Property

Dealing with a distressed property can take significant time and effort as well as anxiety-inducing.. There are many changes that can be made in a house at any given time but each of these changes cost a noteworthy amount and the responsibility that this falls upon must be considered. Dealing with a distressed property can be difficult, which is why looking to an experienced professional can be one way to help ease the process.


Each property will vary on a case by case basis which is why it is important to look at each property as an independent entity. One should seek counsel from experienced professionals in order to determine the scope and nature of complications.