Friday, March 12, 2010

Foreclosures and short sales

A few things you should know
by James Vivenzio
Coldwell Banker Platinum Partners

I want to say first that there are some great opportunities for those who will be purchasing a house in today’s market. It truly is a buyer’s market. There are, however, some important points to remember before signing that Purchase and Sale Agreement.

FORECLOSURES.

Homebuyers should exercise care when buying a foreclosed property. The attractive part of buying a foreclosed property is the greatly reduced price. Just remember that some of these homes have been left vacant for a period of time, and that can create problems.

Buyers should pay special attention to their condition and be aware that while the price looks very attractive, expensive repairs may be needed to make the house livable. Some potential problem areas that may be present in a home that has been vacant are:

Roof, water heater, plumbing, HVAC system (heating & cooling), appliances and plumbing, just to name a few.

Obtaining a comprehensive inspection by a qualified home inspector is worth every penny. Vandalism and neglected maintenence issues are prime reasons why foreclosed properties can need a lot or repairs before being considered livable.

Just remember that foreclosed property can indeed be a great deal for you. Work with a good Realtor who can help you make the right decision.

SHORT SALES.

A short sale means that the property owner/seller’s lender is accepting less money for the payoff of the mortgage than is actually owed. The upside to buying a short sale is that you can find a great bargain in a home.

It’s unfortunate that the seller has found themselves in such a dreaded situation but remember, it’s not your fault, so don’t hesitate for that reason. However, do pay attention to the following facts about a short sale:

A short sale may take 4-6 months to close, if it closes at all; even after being told that the bank has agreed on the price you offered. Often after getting a property under contract there is little information flowing back to the buyer, or the buyers agent. This process can be terribly frustrating. Also, keep in mind that if it takes 4-6 months to close, your earnest money can be tied up for all that time with nothing to show for it.

Yes, short sales can eventually close but remember that of all the types of real estate scenarios you can be involved in, short sales can be the most tedious.

Make sure you’re working with a good Realtor to help you in making the right decision.

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