*** I am not a Realtor. This is just advice from my personal experiences in the home-buying world.***
Since we’re now moving and some of my cohort members are looking to dip their toes in the pool of home ownership, I guess it’s time to post about buying our house. I’ve talked to them about our experience. Buying a short sale or foreclosure may seem like a deal that’s too good to be true, but some research and professional help can open the door to your next home (pun intended).
- Work with a Realtor who knows their stuff. Short sales and foreclosures take a bit more work and experience than a normal house, so finding the right Realtor really can make a difference. I found our agency through another house listing on Zillow. We worked with one agent who showed me the properties and another agent who specialized just in short sale and foreclosure contracts to draw up our offer. This was a huge blessing, and we closed 60 days from when we made our offer. Had we navigated this alone, I really doubt we would have ended up in our house.
- Find out how long the house has been a short sale or in foreclosure and why. The first house that led us to our agency had been in foreclosure for over three years. The bank holding the mortgage literally lost the paperwork and couldn’t sell the house until they found it (you can’t make these things up). Our house was on the market because several offers fell through. My sister and brother-in-law bought a foreclosure in 2015. Theirs was vacant for around three years, and they had some unexpected issues arise that had to be resolved before they could close.
- Look at the neighborhood. A random foreclosure here or there isn’t too bad, but a lot in one neighborhood might indicate a trend. Unless you’re buying your forever home, you will want to reconsider resale value. A lot of foreclosures in one neighborhood can hurt your chances of or offers during resale.
- Be prepared to invest more financially. Some buyers like short sales or foreclosures because the houses are priced beneath their value. But many of these houses are sold as is, and very little or nothing can be negotiated in the asking price in terms of repairs. Some houses don’t even include appliances. For example: the dishwasher in our house was broken and needed to be replaced immediately. The bank owning the mortgage didn’t replace it. That was $700 on top of all the other costs.
- Understand the timeline. As I said, we were very blessed in that we closed 60 days after our offer was made and were able to move our household goods in 48 hours after that. The sellers and their bank were highly motivated to close (I’m guessing this is because an offer had been accepted and then fell through a few months before we came along). Each bank has a different timeline for their short sales and foreclosures. For people already living in an area, this might not be a big deal. For military families like us, waiting to close can create financial hardship if you have to pay for months of housing before closing on your house.
Would you consider buying a short sale or foreclosure?