often leads to very low appraisals, even in markets where home prices are rising fast. Plus, Lane says, most standard loans have requirements regarding a property’s condition and might not go through if certain repairs aren’t done first. That’s a problem with foreclosed homes, which are usually auctioned off “as is.” 6. Time is money (sometimes a lot) A foreclosure purchase can drag on and on. There’s extra paperwork, and response times are slow. And that’s not just frustrating: it can affect your financing. “The bank works the deal in the bank’s time frame, not yours,” Lane says. “If your loan approval expires and interest rates increase, it could result in less favorable mortgage terms.” In a rising market, you could even get priced out of the home. Take a short sale, for example. You’ll be waiting on the current owners, the primary lender, and any lien holders to approve your bid. In Lane’s experience, this can take six months to a year or more. There’s also the fact that a contract to buy a distressed home can be canceled for any reason, at any point up to closing. If someone shows up with a better offer, you’ll lose the home, plus any money you sunk into inspection and appraisal. Meanwhile, you may have passed up other good homes. So, have you explored other options? As you can see, foreclosures aren’t as affordable as they seem once you look past the list price. But it’s good that you’re thinking outside the traditional mortgage box. To help you keep going in that direction, here’s some more info on creative homebuying options: • Tried-and-true strategies for overcoming the top five obstacles to affording a home 120
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