7 Truths You May Not Know about Buying a Short Sale Property
January 18th, 2008 Categories: Alexandria Dirt, Arlington Dirt, Falls Church Dirt, McLean Dirt, Northern Virginia Home Buying, Northern Virginia Real Estate Dirt, Reston Dirt
In the past, I’ve spent a lot of time helping unravel the myths about dealing with short sales, foreclosures and bank owned properties – as a result, here are the top 7 reasons why, as a buyer, you may want to steer clear:
1. Competitive Pricing… In this soft market, short sales are not always priced competitively - sometimes equal to or higher than other similar available properties
2. The Bank calls the Shots… as it relates to the terms of the contracts; they can (and most often do) override certain terms of our Regional Sales Contract and can change terms mid-stream![Images[3]](http://northernvirginiarealestate.files.wordpress.com/2007/09/images3-small.jpg)
– and believe me, these changes and overrides are NOT in favor of the buyer!
3. Property sold as-is… meaning there are generally no home inspection repairs or credits allowed; NOR will any walk-through items be repaired; WYSIWYG
4. The Bank holds the $$… generally in a transaction, the brokerage representing the buyer holds the earnest money deposit. However, in these cases, they will generally ask that the seller (or BANK) hold the money – not a great scenario in my book…
5. Delays? Unexpected and unexplained delays are common. Even settlement dates can come and go without any communication on status – I’ve even heard of delays up to 30–60 days… even when everyone is ready at the settlement table - loan funded and everything ready to go.
6. Closing Costs? Forget it… very few short sale situations will agree to chip in to cover any buyer closing costs…
and…..
7. HOA/Condo violations or delinquencies? Sometimes the seller is unwilling to remedy and this leaves an enormous exposure for the buyer.
I know I’ve painted a pretty gloom and doom picture – but the message is clear – if you can stay away, at least for now, the climate is not friendly for buyers who want to purchase these properties. I’m hopeful that as more flood the market, the banks will ease up and realize that they don’t want to be property owners, or property managers – just sell them and be pleasant!
Tread carefully!
Happy Friday!
Jennifer
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[...] Klaussen with The Arlington Dirt is giving the Arlington Virginia Buyer’s 7 Truths that will help them steer clear through the [...]
Great post Jen. And don’t forget to bring your flash light because the electricity is turned off in most of them as is the water. You’ll have to pay to turn all that on if you want a home inspection.
And also don’t forget that the banks will take multiple offers before they make a decision.
It’s clearly not a good choice if you are not an experienced home buyer or at least working with a great buyers agent to help you along the way.
Thanks Mar… I also like your added comments! It’s a big scary world out there sometimes! We should meet for coffee sometime - when we come out from behind our computers!
[...] peers in other parts of the country can do that. Anyway, as I’ve written before about short sales, I generally try to stay away from those types of sales feeling that it really isn’t the best [...]