Occasionally, home owners may fall victim to owning undesirable properties. More so real estate investors than a one single primary home owner, who owns one home at a time to live in. Some home owners choose to sale an undesirable property, but not always is such an option easily available. Difficulties are common to arise within the fabrics of a simple real estate transaction, but advice from many experienced, professionals within (1) mortgage banking, (2) appraisers, (3) real estate agents, or (4) closing attorneys can assist an undecided home owner into knowing which decision will be best to ease the burden of their home ownership. Just do understand that this is one of those type of decisions that would require experienced, professional advice. Distressed properties are and can be undesirable for many reasons. This can possibly drain a home owner to a point of financial destruction. The home owner should do all they can to avoid a wrong decision or bad advice.
Example one of a distressed property is a home that is upside down in its’ mortgage value vs its’ market value. This means that the property if it were to be sold, the profit margin is at a loss. The market value of the property has sunk low leaving little advantage to home ownership.
Example two of a distressed property could be a situation where the home owner may obtain a property as an heir or joint-heir with estranged siblings who have no desire to care for such a property. Should county or city tax payments go without being satisfied, this would place all the joint-heirs responsible possibly resulting in court collections and credit judgments.
Example three of a distressed property applies more to real estate investors who accumulate large portfolios of many single family homes, and commercial properties, but owners are no longer deeply involved in the business or trade of real estate. Unused properties may be boarded-up to prohibit illegal or forced entry. These homes often appear abandoned or neglected. Only making them perfect targets for construction robbers who rob abandoned properties for scrap and spare parts like water heaters, a/c units, etc. The down side of owning hundreds of properties is when the investors are possibly tired of the business and need to sell in order to maintain a profit. If advised professionally this situation can and has worked out for many.
I don’t give legal advice. This site doesn’t give legal advice. This post gives no legal advice. Please consult your own attorney for legal advice. I have shared example one, two, and three as my reflection to my many years of former personal experience as a mortgage banker. I only gave three examples but there are many more situations that would qualify as a distressed property. United States company. USCA title 26 IRC regulations.
To Your Success,