If you’re considering buying a home, then you may have found yourself attracted to a short sale property because of its lower price. Generally, homes that are listed for short sale are those that have declined in value. A bank often agrees to let the homeowner sell the house for only a portion of what’s owed on the mortgage. The bank then simply writes off whatever the difference is between what it sells for and what’s owed to them.
While many homebuyers find both short sale and foreclosed homes irresistible because of their price, many real estate experts warn that it causes them future expenses they may be forced to pay. One of the more common reason buyers seem to find themselves in a financially disadvantageous position has to do with buying a property in a much poorer condition than they anticipated.
When homeowners are faced with foreclosure on their homes, they may begin to either neglect or damage their homes out of spite. While they may do something as simple as stop cleaning it or cutting its lawn, in other cases, they may damage its interior including its tiling or flooring, fixtures or structure.
An added issue with foreclosed homes is that, as they’re left sitting vacant, they may become attractive to scrappers, squatters, rodents and termites. Their roofs may start to leak and mold may begin to grow.
To make matters worse, many buyers will drop any contingencies, including ensuring that it passes inspection, to ensure their offer gets accepted. Real estate experts note that buyers miss out on being told about costly renovations by doing this.
Short sale properties often don’t come with disclosures. Even then, buyers also often fail to research whether their purchase has undergone an unauthorized renovation or is on a flood plain. By not doing so, they could be assessed fines from the county.
The final downside to purchasing a short sale or foreclosed property is that buyers aren’t well-informed that closing on this type of home requires the lender to approve the purchase. The lender is often swamped with so many offers to process through that it greatly delays the time it takes to finalize the purchase.
If you’re in the process of buying a short sale or foreclosed home, then a Trenton, Michigan, attorney can guide you through the ins and outs of doing so.