The 4 Best Tips for Scoring Bank-Owned Properties (2024)

FAQs

How to value a distressed property? ›

One of the most common and straightforward methods for valuing distressed properties is to compare them with similar properties that have sold recently in the same area. This method is also known as the market approach or the sales comparison approach.

A distressed property is a home that's on the brink of foreclosure or is already owned by a bank or has been repossessed by the mortgage lender. Real estate investors often seek out distressed houses because of the opportunity to buy a home at a lower purchase price.

In North Carolina, most foreclosure properties are sold through county sales auctions. Although you can often find listings of available foreclosure homes online, you cannot submit bids online. You must either attend the auction yourself or send your real estate attorney or agent to represent you to place a bid.

A short sale is a transaction in which the lender, or lenders, agree to accept less than the mortgage amount owed by the current homeowner. In some cases, the difference is forgiven by the lender, and in others the homeowner must make arrangements with the lender to settle the remainder of the debt.

Distressed securities can include common and preferred shares, bank debt, trade claims, and corporate bonds.

When the person or business needs immediate cash and wants to sell the asset at less than its value, it becomes a distressed asset. Distressed assets fall into three basic categories: personal property, equity ownership in a business (which is a form of personal property), and real property.

How Do I Recognize a House as a Tear Down Candidate? Potential tear downs almost always are houses that aren't quite up to current standards in sought-after, attractive neighborhoods. They may be smaller-than-average in square footage, have outdated kitchens, lack sufficient bathrooms and are energy guzzlers.

How long do I have until my delinquent taxes become subject to foreclosure? In North Carolina, real property taxes become due on September 1 of each year, and become delinquent if not paid before January 6 of the following year. Any taxes which become delinquent are subject to potential tax foreclosure.

What action could temporarily stop a foreclosure? ›

Bankruptcy: Filing for bankruptcy can temporarily halt foreclosure proceedings, and an attorney can advise whether this is a viable option for your situation.

When Can Foreclosure Start in North Carolina? Under federal law, the servicer usually can't officially begin a foreclosure until you're more than 120 days past due on payments, subject to a few exceptions. (12 C.F.R. § 1024.41).

Banks are businesses and, just like any business, they are seeking to earn a profit. If it costs more to foreclose over agreeing to a short sale, the bank is very likely to favor the short sale. With foreclosure, a bank takes possession of the house, then resells it at a mortgage auction to the highest bidder.

Lenders allow short sales in order to avoid foreclosure, which is a time-consuming and expensive process. A short sale can only happen with the lender's permission, and a lender won't agree to it unless the seller successfully demonstrates hardship.

The short sale is often preferable to a foreclosure, but it is not a resolution to all a homeowner's financial woes. Aside from potential tax liability and credit implications, if the homeowner is expected to pay the difference between the sale price and the mortgage, that can compound the financial difficulty.

Distressed securities can include common and preferred shares, bank debt, trade claims, and corporate bonds.

The sales comparison approach is commonly used in valuing single-family homes and land. Sometimes called the market data approach, it is an estimate of value derived by comparing a property with recently sold properties with similar characteristics.

Also known as GRM, the gross rent multiplier approach is one of the simplest ways to determine the fair market value of a property. To calculate GRM, simply divide the current property market value or purchase price by the gross annual rental income: Gross Rent Multiplier = Property Price or Value / Gross Rental Income.