North Carolina Foreclosures or Distressed Properties

Posted in Bank Foreclosures | December 19th, 2008

North Carolina houses that are in foreclosure are categorized as distressed properties. This indicates that there is something wrong with either the legal or physical condition of the property. This often means that the owner of the property will sell it for less than fair market value. In these instances buyers are able to purchase these properties for far less than it would sell in normal circumstances.

Although distressed property that is physically damaged is a different set of circumstances to that of the legal kind, the terms still applies to both these situations. With North Carolina foreclosures, the property owner has far less time in which to sell the house than would a property owner with a damaged home. They only have a matter of time before the foreclosure process is complete, and in some states this is less than others. It is because of this set of circumstances that buyers in this case have the upper hand. The property owner may not want to sell but has no other option. Selling the property puts him in a far better position as it will stop the foreclosure process, thereby saving his credit record.

It is for this reason that North Carolina foreclosures sell at less than the current market value of properties that are very similar. North Carolina properties that are already owned by the banks after a foreclosure has taken place a different, but not that much different. Banks do not like being landlords and many of the properties in their inventory fall into disrepair because of neglect and vandalism. This means that they are in actual fact still distressed properties. The banks don’t want these properties on their inventory, they are a drain on their balance sheets and they are often willing to consider lower offers from buyers who want to invest in or fix these properties.

This type of sale is not between disinterested buyer and seller and the bank or seller may be willing to unload the property for enough money to get rid of a non-performing asset that is generating absolutely no profit. Owners of North Carolina foreclosures want to sell to save their credit record and banks want to sell to get the non-performing asset off their balance sheet and get back to the business of lending money. This makes for a win-win situation when buying any kind of distressed property, and generally allows the investor to make good profits, or the home buyer who is handy with repairs, a good bargain.

In foreclosures, the lender is only trying to collect defaulted mortgage payments; they don’t really want to become property owners. The ownership of property does not fit the lenders profile; it is a drain on their financial resources as taxes and insurance have to be paid. North Carolina foreclosures therefore present a very good investment or home buying opportunity for anyone in the market to buy property. Good returns on investments can be made and currently there is a strong buyers market.