According to Trulia, almost 40% of the inventory of homes for sale today are shortsales and foreclosures. Distressed properties are known for their value and also for long drawn out processes that never close or are prone to last minute surprises. Instead of avoiding these properties altogether, obtaining knowledge about the process can help to make these deals less stressful.
1. First of all, work with your real estate agent to make a realisitic offer based on current comps in the neighborhood. You can waste alot of time making random low ball offers on shortsale or REO properties. Banks must account to their shareholders and investors and must try to get as much for these properties as possible. Make an educated offer based on the most recent fair market value of the property. These homes are sold AS-IS so take into consideration the current condition of the property when making an offer.
2. Expect a lengthy process. Banks do not have the same sense of urgency as a regular sale. A shortsale can take up to 6 or 8 months depending on the supervisor approvals , investor involvement and cooperation of the home seller in supplying needed documentation. Make sure you take into account the extra time needed with the extended timelines when you are working with your Realtor or mortgage rep. Locking interest rates may become a factor with long escrow periods.
3. Shortsale or REO home purchases are often subject to last minute delays or the possibilty of never closing . You must stay flexible when purchasing distressed properties. Do not pay for or plan inspections, appraisals or other costly contract obligations until you have written approval of the sale from the bank.
4. Banks are notorious for taking weeks or even months to respond to offers. Continuing to house hunt until you get a firm approval from the bank will help , until you have a committment from the bank, usually you have the right to cancel your transaction if needed and you find an alternative property. Check your contract for contingencies and timelines for approvals.
5. You must realize that you are dealing with a bank and their terms and conditions. These purchases can be much more stressful than dealing with a regular seller owned property, but if you plan for the delays and possible glitches in the transaction along the way, they can be a good investment for the future.
If you or someone you know is looking to purchase a home in St.Johns County, please visit my website at www.bethruggeri.com , search the mls to find current listings of homes for sale in Saint Augustine, Florida. Find out why buyers and sellers have trusted me for over 25 years in St.Augustine .
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