When evaluating real estate options in downtown San Diego, you may be tempted by listings being offered as short sales or foreclosures, typically at prices that may be considerably reduced compared to average listings on the market. In sellers markets such as San Diego, the prospect of purchasing foreclosures may seem attractive for buyers who are looking for lofts, penthouses, and condos for sale in Marina San Diego, but these listings must be navigated with caution, particularly when they present the following red flags.
1. Extreme Disrepair
This is the reason a home inspector is a must when evaluating a home the bank repossessed through the foreclosure process. You can expect to find foreclosed condo units that have some level of neglect since the previous owners probably decided to stop caring about maintenance. However, you may end up having to invest too much time and energy on properties that have fallen to extreme disrepair.
2. Dysfunctional Condo Associations and Communities
During the foreclosure avalanche of the Great Recession, entire neighborhoods became ghost towns. Many condominiums experienced a similar fate due to sharply reduced cash flow because unit owners stopped paying fees. In some cases, trash was not collected, landscaping was abandoned, and common areas were neglected. This red flag is less likely to be encountered in 2017, but buyers should still pay attention to this detail just in case.
3. Exclusive Real Estate Agent Representation
Some banks may suggest working with their real estate agents to complete the transaction and keep acquisition costs down. You will always be better off with 92101 real estate agents of your choosing who are looking out for your best interests.
4. Unresolved Liens
Foreclosures can become highly litigated affairs when they involve multiple creditors and contractors attaching liens to the property. Even though banks are known to diligently clear liens off the properties placed in their real estate-owned (REO) portfolios, some of these legal claims may complicate the purchase process and impede a smooth journey to the closing table. If you are taking out a mortgage loan to finance your purchase, your bank may require you to pay for a title search and a lender’s title insurance policy. You may also want to invest in an owner’s title policy if you notice liens were still pending resolution prior to closing.
Disgruntled homeowners sometimes vent their frustration with vandalism and sabotage on the properties they are about to lose to foreclosure. Banks often provide basic repairs to major damages in their REO properties, but they may not go as far as replacing high-end appliances, cabinets, or granite countertops removed by previous homeowners. Stained carpets and damaged flooring are seldom repaired by REO managers.
6. Properties Sold Under “As-Is” Conditions
Many REO properties are sold with the condition the buyer does not bring any of his or her own conditions to the table. These “as-is” listings are usually sold at heavily discounted prices to buyers who can come up with quick cash and agree to purchasing without the benefit of a home inspection.
If you’re looking for real estate in Columbia District San Diego or another neighborhood in downtown, whether you’re interested in foreclosures or not, make sure to reach out to the trusted local agents at 92101 Urban Living. We can help you find the property you’re looking for. Call 619-649-0368 today to schedule an appointment.