Everybody wants a great deal and there are hundreds of ads, TV shows and websites that offer “unbelievable” opportunities for a “small” fee! But you know what they say about deals that sound too good to be true! Each of the properties in the aforementioned categories are being offered at a discount for a reason…
Let’s look at some examples:
- Short Sales, which are sales that require a lender’s approval, due to the delinquency of mortgage payments, can take many months to either be accepted or denied by the lender. Therefore buyers must be very flexible on closing dates, and or be okay with not getting such a property and having to start the process again on another home.
- REO’s (Real Estate Owned) are properties that the bank has foreclosed on and they discount them and list them with a broker, generally because of the deferred maintenance and rough condition. When people lose a property to the bank, they usually are not happy and have not been putting time, energy, money or love into the property.
- Auctions are challenging properties, because quite often they are distressed – condition wise, occupied by unhappy owners or tenants, and most often cannot be viewed inside until after agreeing to the auction sale price and signing the papers related thereto. Such papers require no financing contingency, no home inspections and closing within 30 days of auction,
As you can see, these types of purchases are not generally easy or appropriate for anyone who is not very experienced in buying, rehabilitation, dealing with difficult tenants and can handle a significant amount of stress and risk. If you are interested in a property that you feel may fall into one of these categories feel free to reach out. I’d be happy to help you figure out if this is the right choice for you.