I have a set of buyers that love the idea of buying a short sale, foreclosure, or REO. They are first time buyers and feel the "deal" they can make on these properties is too good to pass up. We discussed the issues of buying nontraditional real estate, and they were game to move forward. My biggest concern was to get an answer back from the bank in time to close to the get the $8,000 rebate. They wanted to go for it.
We hit the road and saw many of the properties available. We say single family, village homes, and town houses. They selected a few they wanted to make offers on and see what happened. These were properties that had been purchased in the last 4 years for about $360,000 and now were on the MLS at $205,000. Sounds good? Here is the bite. When I ran the monthly payment on these properties, the amount was higher than what they wanted to pay. The bite was the real estate taxes and assoc fees. Both numbers were based on the value of $360,000 and not $205. Both the community the property is in and the association are in need of money. It is very questionable that either one would roll back the amount due. To further add problems to this situation, these properties are in neighborhoods where there are 6-10 such properties. That is further evidence that it is questionable if the fees would go down.
My buyers were so upset. The price of the home was good, but the PITI plus association fees were not. In real estate the big picture can look one way, but the reality can look so different. Tonight we are meeting at my office to see if we can search for a traditional property with taxes in line. Oh, home buying can be a challenge.
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