On paper, buying a short sale home might seem like a decent investment. However, there are potential pitfalls with the short sale that you should be aware of before closing. Here are some common mistakes made by first time short sale buyers:
Passing On The Home Inspection
Would you buy a car without taking it for a test drive? Of course, not! You also shouldn’t consider buying a short sale home until you’ve received a thorough inspection report. Too often, the previous occupants of a foreclosed property have let the home slip into disrepair. It only takes a few months of ignoring leaks in the roof to turn a simple fix into a major headache. If you move forward with the purchase without an inspection, those will become your “headaches.”
You might also want to consider hiring inspectors who are trained in specific areas like mold, bug infestation or foundation issues. There is nothing wrong with making an offer and then setting up the inspection. If the seller is resistant to an inspector then run away. This isn’t the home for you.
Every property will come with its fair share of disclosures. Ignoring those disclosures could prove to be disastrous if you are working within a tight budget. For instance, suppose the renovation work done in a guesthouse wasn’t permitted? If you plan on using that space to generate income, you’ll have to bring it up to code. That will blow a huge hole in your savings. Similarly, if you’re looking at a home situated on a flood plain you could end up having very high insurance premiums. Those kinds of issues can be avoided by paying attention to the disclosures.
You Won’t Be Rushing To Closing
Just because the word “short” is in the title doesn’t automatically mean this will be a fast sale. Although the bank holding the deed might be eager to get the asset off their books, they might not like the fact that they are losing money. This could cause them to drag their heels when it comes to closing the deal. You also want to give yourself time to get through the inspection process and make sure you’re getting a good deal on a mortgage. Be sure to call the Mortgage Network of Ohio, Inc. at 513-347-4070 Jeff at ext 10.
Love At First Sight
It’s easy to fall in love with a home at first sight. However, buying a bad home just because you’re getting a good price doesn’t make any sense. Bottom line: Think through your short sale very carefully.