Foreclosures and other distressed property might look like a good deal, but some buyers are discovering that they just don’t have the stomach for the problems that come with it.
Buyers of distressed property often must deal with severe vandalism, unpaid water bills and homeowner-association dues, hidden second mortgages, and mechanics liens.
Lenders are trying to make these purchases go more smoothly. J.P. Morgan Chase & Co. has twice as many employees as before handling short sales, while Bank of America Corp. now allows real estate practitioners to submit short-sale documents online. The U.S. Treasury Department is expected to soon issue streamlined guidelines to lenders on short sales.
An experienced real estate practitioner with training in selling foreclosures and short sales can make a big difference, but in the long run, buyers who don’t have much cash or aptitude for home repairs should think hard before trying to buy a distressed property.
As Jerrold Horning, a homebuyer in El Cajon, Calif., said, “I don’t think it’s worth the hassles.”
Source: The Wall Street Journal, M.P. McQueen (10/01/2009)