Foreclosed Properties, Short Sales Not Necessarily Bargains

Many home buyers have been convinced that bank-owned properties or short sales are the best bargains.

It's just not true.

Bank-owned properties, sometimes referred to as real-estate owned (REO), typically need a substantial amount of work. Most people think that work means fresh paint and new carpets, not exactly. These properties have a lot of deferred maintenance and many times have been damaged by the last owners.

Sometimes pipes freeze and there is water damage. Other times the properties have been broken into by vandals. Damaged walls and ceilings are not uncommon. Fixtures are often missing.

For those individuals willing to do major rehab, many bank-owned properties have the potential of providing a good return on investment; however, buyers need to have cash or a rehab loan to make the repairs and upgrades. The best deal in the world is not any good, if you don't have the cash to make repairs and upgrades.

An article on Boston.com explains some of the pitfalls of attempting to purchase short sales. A short sale refers to a property where the sellers still own the property, but they can't sell it for enough money to pay off the mortgage(s) and costs of sale.

Many buyers choose to walk away after a couple of months of waiting for a lender response.

In the current market, there are plenty of good deals, without the hassles of a REO or a short sale.

The photo above was taken inside a bank-owned multi-family property.

Read The Inman News Article on Boston.com