Should I Buy a Foreclosed or Short-Sale Home?

by Stan Garnet, a Certified ASHI and Building Code Inspector in Atlanta and president of Consult-a-Home-Pro (CAHP)

People are in a real quandary today and need to make tough decisions. As a property inspector I get to see it all and have opportunity to listen to many sides of the housing market concerns and how it has affected the buying, selling and the building of new construction.

There are deals to be had out there. Typically those deals come with some downsides. Most people are looking for specific neighborhoods, school districts and amenities in the home that they purchase. Many of the resale homes are foreclosure or short-sale properties. A short sale is going to be a much better situation because people are still living in the house. A foreclosure on the other hand could be a home in huge distress. In either case, there will be work needed in order to bring the house into the condition a buyer would want so they could call it “home”. Although there are deals, it only is a deal if all aspects of your needs are met.

It is only a deal if the price paid plus the cost to repair does not exceed the appraisal price of the home. One needs to be very aware of this because, in many cases, the cost of repair far exceeds what was anticipated. There is no point in buying something 30% below value and having to throw so much money into the deal that you are now paying 20% more than the house is worth. If you decide to purchase a foreclosure or a short sale, it is important to hire a qualified and certified inspector to protect your interests.

Buying new construction can be as simple as choosing a lot and establishing your needs on a set of plans and then hiring the right builder to take care of the construction process for you. This is the custom home, and it gets you everything you want and are able to budget. The only exception to that is the choice of lot and location. If location is important to you and you wish to have a new home built in an established neighborhood, then your search needs to be for a teardown home in the location you are after.

There is plenty of opportunity to purchase a track home but this, although new, will not always get you the neighborhood or the amenities you are after. You also need to be aware of any regulations tied to the subdivision that may prevent you from getting exactly what you want.

I recommend you sit down and create a pro/con list of buying resale vs. building and study the list carefully. This way you will have an easier time in deciding which would be best for you. Look at costs, look at utilities, look at lot and location, look at maturity and look at how far you may need to commute. Make sure to do your due diligence. If you require help with a housing problem, then look to www.consultahomepro.com for a builder, remodeler or service provider for all of your housing needs.

Get more expert advice on whether to move or remodel.