Part I: Don't Sell Yourself Short with a Short Sale or Foreclosure
Short sale and foreclosed homes seem to be flooding the market these days.While buying a home from motivated sellers or a bank that has foreclosed may seem like a good deal, there are some things that you, as a buyer, should investigate and consider.
· Why is the homeowner doing a short sale?
· Did they buy too much house or did they lose their job?
· How long have they owned and lived in the house?
· Were the utility costs too high?
· What are the utility costs?
· Did they maintain the property?
· Are there any HOA dues for this neighborhood?
If the homeowner is doing the short sale because they bought more home than they could afford once their loan payments increased, they may not have had the money to do maintenance on the home. You should check the home for obvious issues such as damaged floors, water damage, damaged stucco, damaged doors and windows.
You may need to be prepared to spend money to bring the home back to a live-able condition.You should also consider the utility costs, HOA costs or special tax costs -- these should factor into your decision.If these combined costs are $200-$800 a month, you should determine if you can afford those costs on top of the house payment.Please check out next month's issue when we feature Part II - More Factors to Consider.
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