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We're trying to buy a bargain in short-sale or bank-owned property but we can't seem to get the deal done, what's wrong?

We feel that Short-Sale and Distressed properties are not suitable for most potential Buyers and that is is simply wrong to direct Buyers who require financing contingencies, property inspections and functional warranties on the condition of their home to be wasting time offering on bank-owned properties which are sold under strict "as is" conditions with no contingencies except Lender's ability to grant title and possession.

Moreover, there seems to be a misapprehension that "short sale" properties are, by definition, "better" deals than properties in the hands of private owners. Many bank--owned properties are lacking appliances, may or may not have functional air conditioners and other costly apparatus and may have substantial condition issues requiring a good deal of investment to bring them up to snuff. Additionally, there can be frustrating and lengthy delays in even getting a reply to an offer to purchase this type of property. Great deals can be had but a situation like this might not be helpful if the buyer is an executive relocating for business who needs a place to live and entertain (for example) not a renovation project.

Prices have moderated across the board since the low prices of financially distressed properties also drives down the cost of privately-owned property even if the owner is not in money trouble. A little perspective and self-awareness should be used before deciding that only a bank-owned deal is "good enough."

For those investors looking to profit from the short-sale and bank-owned property we would suggest you prepare yourself mentally as follows:

  • Are you willing to put up substantial cash deposit at the time you make a purchase offer?
  • Are you willing to forego quibbling about inspection and condition issues both initially and during the pendency of the transaction
  • Can you afford (mentally if not financially) to waste a lot of time waiting for a response to your "fair" offer or will this drive you nuts?
  • Can you close for cash or, if using finance, can you produce a firm commitment to lend (not a prequalification) and reference letter from an institutional lender.
  • Can you live with a sales contract that does not provide for any "weasel out" clauses including failure to obtain a mortgage and which places your deposit at risk for forfeit?
  • Can you stand to actually pay the "asking" price (or more) if the deal itself is a bargain or will you simply feel deprived if you can't chisel around?

The point of all this is that the people who will benefit from distressed properties are "players" and can step up to the plate and do what's necessary. For those who think the foregoing is "unfair", this stuff is not for you.

 

 


Unless otherwise stated square footage and lot dimensions appearing herein are derived from county records and may or may not be accurate.
If square footage is material to a transaction a survey or other measurement is recommended. This information deemed reliable but not guaranteed. Current or previous year’s taxes may not accurately forecast future property taxes. Property taxes can increase from one year to the next for various reasons.

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800 West Avenue, Miami Beach, FL 33139 USA
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