Home Buyer - BEWARE!
As Halloween techniques it is a good time to talk about the many pitfalls of buying a home in today’s economy! YES it is a good idea to buy - curiosity rates are low, available homes are plentiful, homes are at an unbelievably affordable price tag - for the smart home buyer there could certainly not be a better time to buy a home!
Many homes on the market are still short sale homes. When a home buyer decides to put an offer on a short sale home there are several things they should undoubtedly be informed of:
Let’s start by clearing up some of the confusion by defining specifically what a short sale is: It is a home that is still owned by a home proprietor, the owner is not going to be able to pay for it, and the home proprietor is making an attempt to get out of the loan at a loss - without having having to pay it back. This can benefit both the proprietor and the bank. The owner of the home may get some of their debt forgiven and some may even get money at closing on top of that! Banks don’t have to spend months and hundreds of dollars heading through the foreclosure process. Banks know that they are heading to take a loss on the home already and the short sale provides a feasible alternative to limit that loss.
Short sale homes offer the chance of receiving a great home at a goodly reduced price tag! Nevertheless, home buyers should understand that putting an offer on a short sale property has several risks. Let’s start with the process and the time it requires to work through it. Time to closing is frequently lengthy (in excess of 4 months in most cases) due to the fact that banks have to approve any offer that is less than what the seller owes on the property. This creates a lot of red tape that can take weeks to respond to. Then it could be a counter and that could take weeks to work out!
Home buyers also need to beware of contracts that banks use when selling a home that is a short sale. Banks frequently have contracts that take away many of home buyer’s rights that are typical of normal purchase contracts. For instance it is quite common for banks to stipulate that they will not pay for fixes to homes after inspections, sometimes they will not even allow inspections to take place! It also isn’t unfrequent for banks to place seller closing costs on the home buyer!
Lastly, homes being sold as a short sale are sometimes sold by sellers who have lost hope and in the process they sometimes lose integrity. Short sale situations are, simply put, one step away from being a foreclosed home. This can be the catalyst for an owner to unscrupulously strip the home of items that must remain or even worse damage the home in anger. Even although a buyer may have the possibility of receiving out of the contract if this occurs, it is normally such a long arduous process and buyers simply go ahead with closing and accept the fact that they will have to restore or replace the damaged items. One way to avoid this is to have your real estate agent keep in touch with the sellers and go by the home several times throughout the entire process.
However, even with all of this a home buyer can find fantastic deals if they are willing to be patient with the process!