Frequently I have people come to me looking for a bargain, some kind of a distress sale, or a fixer upper. Well there are a lot of good buys these days in general. Periodically especially good buys like those mentioned above do come along. They are priced low for a reason people want to sell them quick. Even in distress sales the market sets the price. No one is going to lower the price more than they have to in order to make a quick sale.
When making a purchase on a distress sale there may be multiple offers and the quality of the offer is frequently a factor. In short you need to be pre-approved, have a good deposit and down payment, and be willing to waive inspections or accept current sub-standard conditions. I do not recommend waiving inspections, but the buyer should be making the inspection with thought of finding extreme hidden damages and getting an idea of cost to repair the property. Most sellers on a distress sale are not going to make repairs for the buyer.
The need for a solid offer on a distress sale often precludes the first time buyer looking for an affordable bargain. These first time buyers are looking for a bargain because they cannot afford the normal going price for a home not being sold at a distress price. Yet they also have a lack of deposit, down payment, and credit that prevent them from putting in the best offer in a competitive situation.
As an agent working with buyers the frustration I run into is when I actually find distress sale homes for my buyers. Usually it is two issues that cause the buyer to balk. First, they really do not want a fixer upper. They just wanted something they maybe needed a little paint, maybe a new carpet and some landscaping. The potential buyer is not really ready for the hard work or cost of a true fixer upper. You can get a bargain on a true fixer upper that will appreciate profitably after the fixing is complete, but there is work involved. For the fist time buyer these bargains also represent a financial challenge as they not only need to afford the house (which may not qualify for the best loan) they also have to get a loan for or afford the repairs.
The second issue is people are afraid to pull the trigger fast enough when the bargain is available. Recently a very nice three bedroom and one bathroom home came on the market. It had a two car garage on a large lot. The seller wanted to avoid going into foreclosure and priced the home about $50,000.00 under market. I advised several of my clients about the home and showed it to one of them. The feed back I got was that they wanted to think about it. Fear was expressed over hidden damages and possible unknown issues I explained that the home would not stay on the market long. I also explained even though it was a distress sale normally contingencies would be in the contract and an investigation should be completed before the sale was final. By the time my client was ready to move the house was in contract with another buyer. The home was on the market for about five days.
If you want a bargain you need to be ready to move on it financially and psychologically.