Created Wednesday, 28 January 2009 14:27
Short sale and foreclosure rates are at an all-time high in the housingmarket.Many have found themselves unable to make their mortgage payments and lenders are taking action to recoup their losses. This potentially means good deals are out there, but you should also be aware
of the ramifications of purchasing a foreclosure or a short sale.
It’s imperative that you prepare for the process and are flexible since it takes longer than a normal purchase. It’s also important to choose an agent that has experience in these kinds of listings who can guide you through every step as seamlessly as possible. You may also want to speak to a real estate attorney to determine the potential drawbacks.
Although foreclosed homes are oftenpriced much lower than regular listings, there are some things you should look out for. Foreclosed homes are often sold “as is.” You will be able to have the house inspected before you buy it; however, the bank will not be required to make any necessary repairs. It will be up to you to pay for the inspection and to decide if you should continue with the purchase of the property thereafter.
Any people think another option for a good deal is a short sale, meaning the homeowner is negotiating with the bank to be able to sell the house for less than what is owed on the mortgage. Homeowners who find themselves buried by overwhelming mortgage payments may choose this alternative over foreclosure to avoid bankruptcy and destroying their credit. However, short sales are a notoriously lengthy process, rendering any prospective buyer unable to write a contract on any other home for what could be weeks or months. If you are not restricted to a lease termination, a short sale may be an alternative for you.
With either type of transaction, keep your budget and time constraints in mind when considering the offer. The price may be great, but the possible issues with purchasing an “as is” property may cost you more in the long run.
Courtesy of Navy Federal Credit Union (navyfederal.org)