If you’ve had a sleepless night recently and turned on the TV, you know there is no shortage of infomercials on the joys of buying foreclosures and short sales. The reality isn’t as pleasant as the shows portray, as shown in this Washington post article: [Hat tip Freedom's Phoenix]
As bargain hunters turn their attention to foreclosures, many are discovering the toughest challenge is dealing with the banks that repossessed the homes. These banks are usually quick to accept a bid and write a contract. But the closer buyers get to the settlement table, the greater the potential for bureaucratic bungling and the chance the buyers will give up.
The housing market stands little chance of recovering until the foreclosures are sold. Distressed properties make up roughly a quarter of U.S. homes for sale. Moving them would go a long way toward stabilizing home prices. But working with the banks, which are typically based far from the homes they’re selling, is not as simple as buying from a regular homeowner.
"Things go wrong, and it takes the bank a lot longer to deal with them," said Vivianne Couts, a Virginia real estate agent. "There are a lot more people involved, many more layers. The Realtor can’t always call the bank and say, ‘What’s going on here?’ "
For anyone considering buying a foreclosure or short sale, the article is a useful read. Buyers can come to closing and find out that unresolved issues can make for considerable delays.
Like any other type of real estate purchase, doing your homework first can prevent costly mistakes.
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twist -
Great to have you back on deck! I think the paying customers were starting to get impatient with Igor’s and my attempts at humour
Doomers who want further information on the nuances in the foreclosure market might want to check out old Doom friend Paul Jackson. He’s a journalist specializing in this area, and writes about it in the Servicing/Default section of his HousingWire online journal.
John-
I didn’t think having my foot out of commission would have the rest of me out of commission for so long. I’m hoping to be able to be up and about before too long- although so far, I’m a fairly comical sight on crutches.
When my 13 year old daughter was on crutches, she used to go flying around with her friends at quite a clip. How she managed it, I’ll never know.
This is actually very true. Pre-foreclosure purchases can be even more difficult… this is when you are attempting to buy a home that is headed for auction at the courthouse steps. But, buying hud homes and va homes can be just as frustrating. I have found a good site for Free Foreclosure Listings but they admit as well that it can be quite a process to purchase one.
If I were the buyers, I’d just move in and change the locks.
I would be happy to start a business selling forclosed homes for them, but they aren’t motivated with all that TARP money on their hands.