by Shauna Zamarripa

Created on: January 21, 2011   Last Updated: January 23, 2011

Short sale homes are indeed outstanding deals. The pricing strategy for these homes is to sell them for less than the homeowner’s mortgage balance. Yet, buyers seeing nothing but dollar signs may be blinded from some blatant facts, falling prey to some common short sale buying faux paux.

-Not hiring an inspector

This is a extremely common mistake, and one that can wind up costing a buyer thousands after closing.  Distressed properties are sold “as is”, meaning that the bank will not provide funds for any repairs that the home requires. Many buyers choose to save money on the inspection, because “the bank won’t fix anything anyway.” What these buyers fail to realize, however, is that the home inspection uncovers significant problems that could affect a buying decision for instance: foundation problems, major plumbing defects, mold, asbestos, pest infestation, and major electrical problems; to name a few.

The defects a home inspection reveals could save the buyer from making a terrible mistake. Not having a home inspection can lock a consumer into a contract he shouldn’t be making, and one that will cost a much more substantial amount to repair than back out of. Never buy a home without a proper inspection.

-Buying while the seller still lives in the property

Real estate transactions cause emotions to run high, under the best of circumstances. Add losing a home to the mix and emotions frequently reach a boiling point.

There have been many instances of a buyer making an offer to buy a home, only to find that the seller did some serious damage before moving out. Since the property is sold “as is”, the buyer has no recourse to collect on the damage done and no way of proving the seller instigated the damage. Buying vacant homes is the best way to avoid this.

-Not having a title search done before making an offer

Distressed homes are twice as likely to have liens on them than retail homes. A lien is an ownership interest placed against the property by third parties. The most common types of liens are contractor’s liens, tax liens, credit card liens, and delinquent child support or student loan liens.

The title cannot convey to a new buyer with any existing liens on the property. This puts the consumer in a serious crunch; he either pays the liens himself or faces a closing date pushed back by six months or more as banks and lien holders iron out details. Having an escrow officer perform a title search to check for liens before making an offer saves time and money.

-Expecting dates to be absolute

Short sales are difficult, even for the most knowledgeable real estate professional. Many buyers enter into a short sale agreement expecting to close on a specific date and be able to move in shortly thereafter. Nothing with a short sale transaction is ever set in stone. In other words, do not schedule the movers, cancel your lease or transfer your utilities until after you have closed on the short sale.

Learn more about this author, Shauna Zamarripa.
Click here to send this author comments or questions.