8 Things to Seriously Consider When Buying a Foreclosed or Short Sale Listed Home
You’ve considered moving, but the home you are buying is either a foreclosed or short sale property. You’re not sure just how it works when purchasing such properties. The home is priced right, but you need to know more before proceeding.
Listed below are the 8 most serious concerns for buyers who wish to purchase foreclosed or short sale homes:
1. Home Inspection: A home inspection is highly recommended on every home purchase, but it is especially important when purchasing a foreclosed or short sale property.
2. Appraisal: The home must appraise for the sales price you offer and requires a review by our underwriters to measure the value. Review with your realtor the comparable sales in the vicinity of the new home to be sure the comparable values are in line with your offer.
3. Time: When you make your offer, be sure to allow enough time for the lien holder to accept your offer and then additional time to final settlement. Our experience has shown 60-90 days settlement time is not unusable.
4.. Be Ready…when you receive the go ahead from the lien holder, be ready to move quickly. The time it takes to get approval is slow, but once the lien holder agrees to the terms of sale, things move quickly. Don’t allow the seller to push you beyond the expected time to complete the sale.
5. Sales Contract….have your sales contract reviewed by your real estate attorney. Make sure the contract includes all disclosures and any known conditions that exist with the property.
6. Earnest Money….be sure your sales contract addresses any earnest money deposited. Copy your earnest money check and keep it in your file for future reference. Your mortgage lender may also ask for a copy.
7. Documentation…you want to make sure you can afford to purchase the home. If the home needs some TLC you may want to see if you have enough additional assets to make the purchase or are you expecting to get a mortgage that addresses those concerns. Knowing mortgage programs and getting Pre-Approved is essential.
8..Attorney…you want to make sure the home you are buying has a clear, unencumbered title. Hiring a qualified real estate attorney or title agent is very important. Don’t be afraid to ask for credentials and client testimonials.
There are some great buying opportunities on the market at this time. Usually there is a reason behind why a property is being offered at a below market price. As buyers you’re key question to ask is whether or not you can tolerate the possibilities of dealing with uncertain issues that may arise during the purchase transition.