It doesn't matter if you are purchasing residential or commercial real estate, there may come a time when you run into a short sale. This is when the bank has agreed for the owner to sell the property for less than what he or she owes.
As a buyer, you may not think this has anything to do with you. After all, you weren't the one who agreed to the short sale. However, this will impact the buying process.
Here are some of the biggest mistakes a short sale buyer can make:
-- Overlooking the importance of an inspection. Just because you are buying a short sale doesn't mean you should skip over the inspection. It is important to know the condition of the property, as this will help you decide how much to offer and what it will take to make repairs once you become the owner.
-- Ignoring important information. To protect yourself against a big mistake, read over the disclosure several times. You want to learn as much as you can about insurance and legal related details. Since bank-owned properties are sometimes sold without a disclosure, you may have to do more legwork.
-- Being in a rush. Buying a short sale (or foreclosure) can take more time than a traditional transaction. The reason is simple: the lender is more involved. If you are in a rush, a short sale may not be right for you.
If you are in the market for any type of real estate, don't be surprised if you come across at least one short sale. Knowing how to approach this type of property and transaction can be the difference between success and failure.
Source: Bankrate, "5 buyer mistakes in a short sale" accessed Mar. 12, 2015