Buyers are naturally drawn to distressed properties because they represent bargains and in our Sacramento housing market a large percentage of the homes listed for sale are bank owned or short sales.  Before buying any property there are many items to consider but here are three which relate to distressed properties/

Inspections: Almost all distressed properties are sold "as is" and buyers need to be particularly careful to understand exactly what they are buying.  Obtaining a pest inspection and a home inspection are vital elements in making sure buyers know what they are getting.  Additionally with bank owned properties the California Property Disclosure which, in a normal sale, is completed by the seller and will alert the buyer to items in need of repair or even neighborhood nuisances is not available.

Short Sales:  If your home buying and moving is on any time schedule you may want to avoid short sales.  The time to get an approval from a short sale lender can vary from weeks to months and until you see it there is not guarantee you will be able to move forward with the purchase.  There are many buyers who have waited months to buy a short sale only to see the negotiations fail and the property become unavailable. 

Appreciation:  Even though distressed properties can be bargains, buyers should be cautious about expecting any kind of immediate appreciation.  In today's real estate market buyers should not base a purchase decision on appreciation in the near term.  Our Sacramento real estate market is still depressed and we are probably not going to see prices appreciate for some time.

In the Sacramento area housing market, it is almost impossible to avoid bank owned and short sale listings.  A great percentage of our active listings are these kinds of distressed properties.  They can be good purchases if you know what you are doing our working with an experienced agent who can guide you through the process and reduce the risk of buying a bank owned or short sale property.

Here are a few interesting facts about the current housing market:

• Nationally, almost 50 percent of homeowners have mortgage balances higher than the home is worth and this is growing (unable to sell for enough to pay a Realtor and put a down payment on a new purchase without coming out of pocket).
• Nevada has the highest share of underwater borrowers with over 300,000 homeowners in this situation.
• Nationally it is estimated over 11 million homeowners are underwater.

If you or someone you know is interested in buying or selling and have questions, please contact me at the MagnumOne Realty office in Roseville.