Owning a distressed property can be tough. Knowing what to do can be difficult, whether it’s a primary residence facing foreclosure or an inherited property in terrible condition. If you have been researching “how to sell my distressed property,” we can help.
We’ll walk you through a step-by-step guide to selling a distressed property, from assessing your situation to finding companies that buy distressed properties and more. We recognize that understanding the process and your options can help eliminate stress, which is what we’re all about.
What is a Distressed Property
A distressed property typically means one facing foreclosure or already in the foreclosure process. It may also mean a property where an owner is behind financially on mortgage or loan payments.
A home in disrepair, where damage occurred from accidents, negligence, weather, extended vacancies, or vandalism, may also fall into the distressed category. Life events such as job loss or illness can often precipitate property issues.
In addition, many of our clients inherit a distressed property after a family member’s passing. Regardless of what led to the situation, we recognize that it can be stressful to sell a distressed house, and having the correct information about what to expect can be helpful.
So, let’s jump in with a step-by-step guide to selling distressed property.
Step 1 – Assess Your Situation
The first step in navigating a distressed sale is to assess the situation. If you’re facing a foreclosure of a primary residence, for example, take the time to understand how long you have before the lienholder moves forward. If you inherited a distressed home and don’t know what to do, plan a site visit with a professional or contractor who may be able to determine the level of damage, necessary repairs, etc.
Next, decide if selling is the best option. If you can avoid foreclosure and stay in your home, you may want to take the necessary steps to do so. If you can afford necessary repairs and want to utilize an inherited home as a rental, for example, take the time to get multiple quotes and determine what makes sense for you.
Another step may be to consult with a real estate professional to assess the home’s value in its current condition. The more information you have, the better you can navigate the next steps.
Step 2 – Understand Any Legal Requirements in Your Area
If you’ve decided that it makes sense to sell your property, we recommend looking at any legal requirements in your area related to foreclosures, cash purchases, etc. Stress Free Homebuyer is located in Long Island, New York, and the rules related to our industry differ from those in other states and areas.
Before you sell or transfer any property, we recommend that you consult with a real estate attorney, even if you decide to work with distressed home buyers who use cash.
Step 3 – Getting Ready to Sell Your Property
When you work with companies that buy distressed properties, typically, they are cash buyers that make an as-is purchase. As-is sales simply mean you can walk away without completing any repairs, appraisals, or inspections.
At Stress Free Homebuyer, we’ve worked with hundreds of clients and can recommend things to help you get ready to sell your property, even in an as-is sale. We recommend gathering any documentation that will be necessary for you to sell, such as title or mortgage statements related to the property.
Another step would be to remove any personal items or valuables you wish to keep from the home. This can be especially important if you inherited a property and aren’t sure what may be onsite. Once you start the cash-buying process, it can go quickly, so having a plan to keep or remove anything you wish is a meaningful way to avoid any regret after the fact.
Step 4 – Find Your Buyer
For some sellers, using a cash buyer makes the most sense. But it’s a good idea to weigh the pros and cons of a traditional transaction versus using companies that buy distressed properties. If you have a property that is not in financial trouble or poor condition, a conventional sale may be the right decision. This is especially true if you’re not in a hurry.
On the other hand, if you want to sell quickly or don’t think the home will pass typical inspection requirements, distressed home buyers can make that happen. If you’ve decided to use a cash home buyer, the next step is to find someone reputable. Don’t make the mistake of moving so quickly that you work with someone inexperienced. We recommend doing your own research to identify distressed property buyers who are knowledgeable of the local area, have years of experience, and have positive success stories and reviews.
Step 5 – Complete the Sales Process
If you’ve decided that a cash buyer is right for your situation, it’s time to get an offer. Request offers from reputable buyers you’ve identified in your local area. More than one offer will allow you to compare the purchase price and sale terms and ask any questions about the companies you’re considering.
Once you’ve evaluated the offers and reviewed them with an attorney when appropriate, you can accept the best option for you and your situation. This will involve signing any purchase agreements and ensuring all legal documents are ready to complete the transaction.
Lastly, you’ll transfer ownership of the property. This is done on an agreed date, ensuring you have time to remove any necessary items. One of the best things about selling a distressed home to a cash buyer is the speed at which you can close the sale. At Stress Free Homebuyer, we can purchase a home and complete the transaction in as little as two weeks!
Frequently Asked Questions
Have more questions about the steps of selling a distressed house? Below are some frequently asked questions and answers.
Where is the best place to start if I want to sell my distressed property?
One of the best places to start when considering a cash buyer for your distressed property is with an assessment of the situation. Are there any pending liens, judgments, or foreclosures related to the property? If the home needs repairs, do you know how much they’ll cost or how much time they’ll take?
If a cash buyer is the right fit for your needs, look for those with experience in your local area, positive success stories, and client reviews.
How do you value a distressed property?
The value of a distressed property can be determined using several different methods. One method is to assess other comparable homes that have recently sold in the area or to estimate potential rental income from the home once repairs or remodeling are completed.
At Stress Free Homebuyer, we buy distressed houses and understand that our clients expect a fair offer. Because we have worked in the Long Island area for years, we understand the nuances of various neighborhoods and communities, which means providing the best possible offer for sellers. If your property is located outside the Long Island area, we recommend looking for someone local to you with years of proven experience and positive reviews.
