Distressed Properties
Foreclosure properties, short sale properties and REO are all forms of distressed properties that are available in the WNC real estate market. While there are areas across the US that these types of distressed properties make up a good percentage of their market- that is not the case here in the Greater Asheville area. The following explanation for each of the types of properties is designed to give you an overview, but like all other aspects of real estate, talking with your Realtor will gave you a well-rounded and up to the minute report on how each of these segments are doing.
Foreclosure is actually a legal process by which the current owners (defaulted borrower) are deprived of their interest in the mortgaged property. The process can be lengthy and while it is certainly possible to purchase a property from the current owners before it is actually offered for sale “on the courthouse steps”- it is not a process to be entered into without fully understanding the entire process.
REO- These are properties that are already owned by the bank (lender)- they were not purchased by another party on the “courthouse steps” and are involuntarily transferred to the lender. They are now offered for sale, by the lender, generally through a local real estate firm. As a rule, these are easier to purchase, as banks typically do not want to carry this inventory any longer than necessary. But here too, you will be best served by your Realtor- they will have access to past sales numbers and will be able to help you through the process, as there may be specific requirements that pertain to these transactions.
Short Sales- Contrary to what the name may imply- this is not a quick sale. The term short sale means that the sellers have to sell “short”- they owe more on the house than it will bring in today’s market. This happens frequently with cars and other large ticket items that lose value rapidly but it isn’t something that has, in the past, happened in such large numbers in real estate. In this process, even though the owners will review the offer, the current lender will have the final say so- and this is where the process can stall. If you are a buyer with lots of time, a place to live in while this happens and are willing to wait, you may find Short Sale properties of interest. There are certainly exceptions to this process, but it is best to understand all of the options before you get started.
Like all aspects of real estate, what happens in other parts of the country with distressed properties may not be what happens here. Rely in your agent and your own research to give you a true picture of the distressed property market in WNC.
