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Distressed sales - 11 May 2009

Posted by lu lu 1 comment

What is the benefit and downside of buying distressed property in Australia? Is it illegal to buy distressed property overseas?

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1. Paul Collins - May 11, 2009

The term 'distressed sales' can sometimes be a little misleading when talking about property, which is why some people prefer to use the term 'motivated' sales. Essentially, describing a property as a distressed sale doesn't refer the the state of repair of the property or imply anything untoward. It means simply that the property may be for sale at a price below what might be expected in the marketplace.

As the properties are placed on the market at the free will of the owners, there is nothing illegal about buying a distressed sale and it can be a great way of getting hold of a property for a little less than planned. At the same time you will be helping out the seller as they clearly want to make the sale and are likely to need the money for something else.

The main disadvantage of buying a distressed sale is that the lower price of the property can sometimes mask other problems that may exist.

Make sure you carry out thorough research to make sure the property is in the location, state of repair and unemcumbered financial situation that you expect. Just because the property is for sale at a lower, or even bargain, price does not mean that you should skimp on legal services - you should always use an independent, expert lawyer throughout the transaction process.

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