Are you thinking about purchasing a home? Did you hear that buying a repossessed home might save you money? Would you like to know the TRUTH about properties offered for short sale or that are banked owned?
First truth, is the buyer needs to be aware that most of these properties are going to be bought "AS-IS." In other words, the homeowner that is selling their home on a short sale is not going to have the monies available to fix something that might be wrong with the property. (A short sale is the process before a foreclosure happens to the property.)
If the property is "bank-owned" or a "HUD property" you will find that these entities do not normally fix problems with the property either.
So when considering the purchase of one of these homes it's important to have the resources to repair and/or rehab the property. AS-IS means what you see is what you get. By all means it's important to have a Home Inspection done. This will help you to know what problems are there and whether the price of the home and the repairs make this a viable buy. If not, you may want to consider passing on the home and finding something more suitable to your resources.
Second truth, a prospective buyer will need to be patient with the process. When dealing with short-sales or bank-owned properties it is important to find the person who is going to make the decisions. Often times there is a hierarchy that one must go through before reaching the person that actually can say yes or no to an offer presented. Besides that, the bank REO department is not normally there in the evening or on weekends to ask questions or receive answers. It may take 3-5 business days to receive word about your offer to purchase. Negotiation with a bank can take many counter offers and delays. For some buyers, this is just too nerve racking to wait out.
Third truth, these types of properties are not always a "deal." Sometimes the cost to purchase the property repaint, re carpet and fix any major repairs could cost as much or more than other homes that are similar in the neighborhood would appraise for in value.
Fourth truth, many of these bank-owned properties have limited disclosures. The "Bank" as the seller is not legally bound to disclose defects. And many of these homes do not have the utilities turned on or have limited utilities running in the house making it more difficult to know the condition of such items like plumbing, electrical and heat.
In closing, the HUD Properties are handled differently. I will cover HUD in another post. Are there deals to be found? In some cases, yes. Should you purchase these properties without representation? I would have to say no. There's a lot of paperwork involved with bank-owned properties and some pitfalls that can be avoided when using an agent experienced with these types of properties and situations. Agents are more successful when dealing with banks and their REO departments. If you are interested in what's available, please visit my website http://cyndisloop4indyhomes.com.
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