To be in financial distress is to be unable to meet your financial obligations. In relation to real estate, a piece of property can be deemed to be in financial distress if the homeowner is unable to meet the financial obligations as stated in the mortgage or deed of trust, keep taxes current, or is burdened with liens placed on the property.
What are some causes of financial distress?
There are several situations that could lead to financial distress. Some of them are;
- Bankruptcy: Bankruptcy is simply a situation where a person or a business legally declares that they are unable to settle their debts. This process temporarily shields them from their creditors. In some states, after filing for bankruptcy, you can sell your house to settle debt. As a result of the pressure from the creditors, the homeowner might have to sell the house quickly.
- Facing Foreclosure: Foreclosure is yet another legal process that allows a debtor to reclaim a property once the homeowner is in default of the loan. In some situations, a homeowner may be able to renegotiate the terms of the mortgage to stop a foreclosure. Or, when circumstances do not allow renegotiation, selling the home may be a viable option. Foreclosure proceeds typically continue while the home is on the market. However, having a signed contract with a qualified buyer will typically stop or halt foreclosure proceeding. Although losing a home is difficult, selling will help you avoid the negative impact to your credit rating common with foreclosures.
- Tax/Mechanic’s Liens: These liens are involuntary but ordained by law. When you fail to pay your property or income taxes, a tax lien could be enforced. Also, contractors, subcontractors, or even suppliers can place liens on the property for lack of payment. These financial claims will not be lifted until the debt is cleared. Excessive liens could force a homeowner to sell. However, many buyers are reluctant to purchase property that have title issues such as excessive liens.
- Bad Tenancy: Bad tenants cost money, take up time, and cause problems. Eviction proceedings can be costly and time consuming as well. Once an eviction begins, angry tenants may also engage in destructive behavior to vent their frustration.
What do I do when I’m faced with financial distress?
Being in financial distress is a challenging issue on its own. Sorting out real estate at the same time will make the whole process worse. But all that worry can vanish in no time if you decide on a quick sale to a cash buyer.
There are firms that specialize in purchasing such distressed properties, repairing them, and making them marketable. Realty With Rich is one such company, proud to offer real estate solutions for real problems. It is a property redevelopment and investment company that purchases properties in need of renovation. They renovate such properties and then resell them to new families. With the Realty With Rich team on your side, you will not need to worry about making any repairs. And the process will be fast and reliable or on the your timeline.
Call us today – (833) 442-SELL.