Short sales and foreclosures can be very tempting for buyers looking to score a great deal on a house. However, they can also come with rather unique challenges and many buyers may find the challenges to be a bit much, especially if they are shopping for their first home.
While short sales and foreclosures can be great for those looking for a deal, they come with many potential pitfalls. Here’s a look at some of the most common pitfalls you may run into.
Hidden Costs
The person that owned the home for sale likely had financial issues causing the short sale or foreclosure. In all likelihood, they couldn’t make the mortgage payment, which means they probably didn’t keep up with the maintenance of the home.
These properties are usually sold as-is and buyers don’t get to negotiate repairs, in most cases. Make sure you hire an excellent home inspector or you could end up finding plenty of hidden costs you didn’t consider.
Delays in Closing
When you buy a short sale, you’d think the process would be quick. After all, the seller is trying to get rid of the property. However, these types of deals often come with purchasing delays because the process isn’t as easy, especially with a foreclosure.
It takes about four to six weeks to close on a normal home. On a short sale, it may take six months to a year. This is due to the fact that you won’t be dealing just with the seller, but also the bank.
Larger Down Payments or All Cash are Preferred
When selling a short sale property or foreclosure, the lender often seeks out an all-cash offer or one with a very large down payment. This can make it hard for traditional buyers to compete in this space. The larger down payment or all cash offer provides less risk for the lender selling the property since the buyer doesn’t have to get as large of a mortgage.
While buying a short sale or foreclosure may seem enticing, it comes with plenty of risks. Before deciding this is the route you want to go, you should have a plan and know what you’re getting into. The last thing you want to do is end up with a property that seemed like a great deal but causes you more headaches than it’s worth.
We currently have approximately 70 homes for sale in Mint Hill, NC. None of them are foreclosures or short sales, which is great for our town and home values.  The overall inventory of foreclosures and short sales has decreased significantly over the last several months and years.
I would love to be part of your journey when the time is right for you. If you ever have a real estate question or need, or know someone who does, trust that you can turn to me.  I will help you make the right move! Anna Granger 704-650-5707 | annagrangerhomes@gmail.com.
