Last week I discussed some of the benefits of buying a foreclosure or a short sale property. Today I want to mention a few things to be aware of before committing to a distressed home.
1. Sometimes these types of properties are in very poor condition and require a lot of repairs to make them livable and comfortable. If you find one that you’re really interested in, take a qualified inspector or contractor to see it with you BEFORE you make an offer so you have an idea of what it will cost to fix it up. There’s no point in buying a place that will end up costing you more time and money than a comparable house in good condition.
2. Be prepared to wait. There’ s nothing “short” about a short sale, and even foreclosures can take longer than the typical home sale. If you have a lease that is about to run out, make sure you have alternative living arrangements in case your settlement takes longer than you expect.
3. Distressed properties can sometimes be tricky to finance. Unless you’re coming in with cash or getting a conventional loan, lenders may have trouble getting approval for a property that has major problems. Talk to your loan officer about the options available to you and find out what the potential repair requirements of your loan may be.