Regular Sale … You Know The Home That Is NOT A Distressed Sale, Foreclosure, Short Sale, Or Wait Forever To Hear From A Bank Property Listing …
The regular sale has become an endangered species as more and more properties being sold around the country are distressed sales! But, my question is will this trend continue as the press boasts how these homes are the BEST Deals out there on the market? Unfortunately, you do not hear the negatives of buying a distressed sale in today’s market.
Become An Informed Buyer:
Below, please find a list of the 6 negatives of purchasing a distressed sale:
1. Higher taxes
(Homes in foreclosure were purchased at the height of the market and current taxes are usually higher and are no longer homesteaded properties making the new buyer have a more difficult time financing as well as paying higher taxes until the property’s value is reassessed in the next year).
2. No Repair Money
(All distressed sales are sold in As-Is condition making the buyer pay for improvements to the property. The banks will fixed only the major defects such as the roof or major appliances. Other repairs can add up in costs to the buyer!)
3. Title defects
(Many distressed sales have multiple liens which can take an extended time to cure. As a result, buyers must be assured that the title company clears all liens before closing on the properties).
4. Long negotiations with banks
(Distressed sale negotiations with the bank can take many weeks or even many months. If a buyer must close on a property in a certain period of time, possibly 3 months or less, they might not be able to buy and close on a distressed sale. Buyers need to work with real estate agents that specialize in distressed sale negotiations).
5. Higher mortgage rates
(As buyers patiently wait for an answer and hopefully approval from the bank, mortgage rates could increase. A buyer cannot lock in a rate if they do not have an executed contract with an expected closing date from the bank).
6. No Guarantee The Seller Will Close
(A short sale buyer can go through the long negotiating process with the bank and agree on price and terms. Then, the buyer can pay for an appraisal and home inspection and be ready to close on the property. But, the distressed owner must come to closing and sign the paperwork. In some cases, the owner falls of the face of the earth, and the buyer is left unable to close and money out of pocket from paying for an appraisal, inspection, as well as spending time and money to move. Ouch!)
Sometimes the saying that if it sounds to good to be true, it usually is! Well, this certainly can apply as the end result for a potential distressed sale buyer. Enter at your own risk! Work with an experienced real estate professional that can guide you throughout the buying process and truly help you decide if a distressed sale is your best option when buying a home! In the end, you may not be getting the best deal!
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