Distressed Homes
Without specialized knowledge about how to handle the purchase of a distressed home such as a foreclosure, short sale or REO, you could find yourself in dangerous territory. We are experts in locating and advising you through out the complete process of buying a distressed home.
The reason for buying a distress home can range from you being a contractor with some experience, or you might want to go through a construction or redevelopment process to create your customized dream home. Whatever reason it is the bottom line is you will eventually save money and buy into the equity of the home creating a viable investment for the future when you decide to sell the house.
The process of buying a distress home is very unique, and should not be assigned to a real estate agent that does not have any experience in this specific area. A Realtor having experience in both construction and acquiring homes at a discount is a MUST! We at Angel Realtors like to explain the process in these three simple steps:

1) Structuring the Finance
Depending on what type of rehab the home needs, it will dictate the type of financing that will be available or appropriate for the renovation.
2) Finding
The process of finding a discounted property is not very simple, there are specific traits that your Angel Realtors will look for in order to find the ideal property for your needs.
3) Analyzing
This is the most important step of them all, on doing your due diligence you need to analyze all of the repairs and make sure that the repairs are within your budget.

1) Structuring the Finance
If you are not paying all cash for the home then a professional mortgage broker will be able to help you in deciding your best finance option. There are three major types rehabs that a distressed property might need. They range from just cosmetic repairs to a complete rehab. Depending on what type of rehab the home needs, it will dictate the type of financing that will be available or appropriate for the renovation.
1) Structuring the Finance

2) Finding
While many short sales are foreclosures, not all foreclosures are short sales and not every short sale is in foreclosure. To further complicate matters, REOs are not short sales either, but some intended short sales can end up as an REO.
What is a Foreclosure Property?
A foreclosure property is a home in foreclosure — when a notice of default has been filed in the public records. It means the owner has stopped making mortgage payments and the lender has given notice that unless the payments are brought up to date, it will sell the property to the highest bidder.
Lenders can foreclose for other reasons, but the most common reason lenders file a notice of default is when a borrower is at least two payments in arrears.
What is a Short Sale Property?
A short sale occurs when a home owner is in foreclosure but before the property goes to public auction. Under a short sale, a lender must agree to accept less than the amount that is owed on the property.
Unlike a foreclosure, investors typically buy the home for even less because investors are not paying off the existing loan nor making up the back payments. Investors are striking a deal with the existing lender to take less than what the lender has coming to avoid dealing with a foreclosure.
What are REOs - Real Estate Owned?
Banks end up owning the property when nobody at the public auction bid enough to cover the amount owed against the property. REO homes are often considered the best way to buy a distressed property because the seller is already out of the picture. It’s just the investor, the investor’s agent, the bank and the bank’s agent who are negotiating the transaction. Some REOs can be purchased directly from the lender.
- Buying an REO is similar to buying a short sale except the property is already owned by the lender.
- The property was acquired by the lender through a foreclosure action.
- Often lenders will sell repossessed homes for less than the past loan balance.
- Bank-owned properties are called REOs, meaning real estate owned by the lender.

3) Analyzing
This is the last and most important of all steps. This is where you will do all of your due diligence, it will be a detailed analysis of all repairs and work that you will want or need to put it towards the house once you purchase. Your Angel Realtor will be able to help you or your trusted general contractor will be able to do a break down all repairs needed.
We always look at the 10 major items, that could make or break the deal:
I am interested in buying a distressed home!
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