Foreclosures & Short Sales: Buying a Money Pit?
Foreclosures and short sales in US Real Estate seem to be great deals, but let the buyer beware: You could be buying a money pit.
A foreclosed home is bought as is and will not have the history available that a seller would be able to give you. This means you will buy the home and accept the flaws it may have; in many cases the former owner will have ceased taking care of it before the home went into foreclosure. Remember you’re dealing with people with big financial problems and you don’t really know what you’re getting.
Buying a foreclosed home will often result in additional waiting time as well as work. Also remember you need to have cash on hand because of the short time frames involved in closing.
Do your homework:
- Title searches
- Hidden leans and claims
- Damage from disgruntled homeowners
- Hidden maintenance issues
- Unpaid taxes