Buying or selling a distressed property will be challenging and can expose sellers and buyers to higher levels of risk. In the past, the most important three words in real estate were “location, location, location!”. Perhaps those three words should now be “attorney, attorney, attorney!”
When buying a bank owned (foreclosure) property, buyers must agree to use the bank’s contract which is written in the bank’s best interest. Buyers should consider hiring an attorney to help them understand what they are signing and explain their exposure to risk. However, buyers should not expect banks to accept any changes an attorney will want to make to the contract. Usually, it’s the bank’s way or the highway!
Short sale properties are probably less risky, but frankly, they are often a giant mess of red tape. Successfuly buying or selling a short sale is tough. They typically take months and months….and months…. to get bank approvals. They are complex, frustrating, emotional and the majority of short sales fail. Sellers need to absolutely get the advice of a real estate attorney before putting their home on the short sale market. They should also discuss the tax ramifications of a short sale with their CPA. Buyers need to understand that it may take forever and a day to get a bank response on their offer. During that time loan interest rates may rise.
Real estate is a different animal than it has ever been before. Sellers need to have a top-notch team at their side. The team should consist of a Realtor that has a distressed property expertise, a real estate attorney, a bankruptcy attorney and a CPA. Buyers should have a Realtor with distressed property expertise and a real estate attorney.
Real estate is a long term investment. This is the time when buyers can find bargains and sellers should wait it out, if they can.
TO SEARCH FORECLOSURE PROPERTIES GO TO: www.KevinGormanSells.com
All my best,