There are so many bargains out there, but do you really know what you are getting into purchasing a short sale or foreclosure’ If you don’t, I would highly recommend hiring a Union County REALTOR® who is experienced in these types of transactions, to guide you through what could be a long and arduous process. I would never recommend a buyer to “go it alone,” without expert help.
First of all price. The price that is often listed on short sales and foreclosures, mayor may NOT be the actual price the bank or lender will accept. Don’t think you can go in and ask for 30-50% off the listing price, when that may actually be their starting bid price. Sure you can try for a little off, that’s negotiating. But you also must understand you do run the risk of being outbid by someone who understands that short sale or foreclosure has already probably been heavily analyzed by agents and appraisers alike, and set at a price to move quick. And it’s been the trend lately, for banks and lenders to set these prices quite low to generate activity and even bidding wars.
Yes, I said bidding wars, in a buyer’s market. But consumers are lured in on these bargain basement prices, then get their emotional heartstrings attached to a home, and have a desire to “win.” This can play against them in actually getting a good deal.
Doing your due diligence, including many inspections, possibly getting repair bids, and also conducting a very thorough title search up front, are keys to buying right. These types of homes are almost always sold “as is,” so there won’t be any negotiation on these items within the offer. Doing these things may reveal future costs, such as needed roof repair that costs more than $10k, replacing all those stolen appliances at $2500, or having to cure title by paying that tax or Homeowner’s Association Lien for $5000, that when added to the price of the home, may not make it such a good deal anymore.
And there may even be difficulties after you close a home. Sometimes it takes a while for paperwork matters, such as liens or pending foreclosures to be dropped. I have recently heard of one short sale buyer suddenly being met at the door with a “team of processors” to trash-out and re-key their home! They have been in fear ever since that had they not been home, that they literally would have been evicted and their furnishings damaged or auctioned off, which there have been documented cases of around the country. Their agents have been advised by the bank, that it is a probable paperwork issue that may take weeks to get resolved.
I don’t want to present the picture that all short sales or foreclosures are not worth the hassle. Many of them are excellent deals. But they can take months and lots of extra money that isn’t in the “price” to get to closing. Be sure to also consider that resale or new home that is priced right, and always use your expert Union County REALTOR® to guide you through the buying process.