45% of the buyers who responded to the survey said that they did not even consider purchasing a foreclosure when they looked for their home.

Although the survey didn’t ask respondents for reasons, purchasing a foreclosed property can be a frustrating process. With a typical real estate purchase, you submit an offer and within 24 hours the seller responds. If you are buying a foreclosure, receiving an answer in a week is a fast turn around for a bank and waiting up to a month to get a response is not unusual. Foreclosures are sold in “as is” condition meaning that you have the right to have a home inspection, but if you aren’t happy with the results, your only recourse is to back out of purchasing the house.

I’ve seen banks do some pretty illogical things, too. In one recent sale, it took the bank 6 weeks to have the house dewinterized for the home inspection. Then they said if the closing didn’t happen by the end of the month (which was 3 weeks away), they were going to put the property back on the market. They were the ones that had caused the delay! Even their attorney told them it was irrational.

The moral of the story is that you can get a good deal buying a foreclosed home but you need to have patience and fortitude and be prepared for frustration as you go through the process.

When: Wednesday, May 7th from 7 – 9 PM
Where: Medford Fire Station 5
Zero Medford Street (at the intersection of Medford Street and Main Street)

Learn What To Expect In This Market When Selling Your
* SINGLE FAMILY HOME* MULTI-FAMILY * CONDO* INVESTMENT PROPERTY

John Masciarelli, A local real estate attorney and I will discuss:

For those who pre-register: we will review the most recent sales in your area and discuss how these sales impact your property selling plans. Sign up by May 5th by calling (781) 446-9720 or email me. Please include your property address if you’d like to be included in the area price round up.

You can listen below or click to download the MP3 file: Foreclosures and Short Sales

Download audio file (foreclosures.mp3)

It is very expensive for a bank to foreclose on a property. For that reason, many banks are willing to allow you to sell your house for less than the mortgage, forgive the remaining debt (and pay your real estate agent’s fee) as long as you are able to show that you have a financial hardship and foreclosure is the bank’s only other option.

Although Congress is working on changing this, currently the IRS considers any money forgiven in a short sale situation as income and it’s taxable.

Short Sales take more work and time, but they can be a win/win situation – you get out of a bad financial situation and the bank lessens their losses.