Bank owned foreclosures often look like the best deals on the real estate market. The banks are so anxious to unload the debts; they are willing to sell the properties far under market value. If you are considering purchasing a short sale or foreclosure property, be aware of hidden fees that may drive up the cost.

Deferred Maintenance

Foreclosed properties are usually sold "as is," and this is of primary concern when it comes to deferred maintenance. If the previous owner could not afford a mortgage, the owner likely also could not afford to maintain the home properly. You should be aware of major flaws because the bank will not correct them before the sale goes through. Be sure you order a home inspection to properly examine the condition of the property.

Fast Closing Date

You will most likely be asked to close you loan in a few weeks. This can leave you signing a mortgage loan before you are prepared, generating higher interest rates or less favorable terms in exchange for the very quick turnaround on the loan. Try to schedule a closing that is at least 30 to 45 days after the signing of your contract to avoid feeling pressured into any loan terms.

Transfer Fees

There are transfer fees, also known as document transfer fees, for all real estate transactions. Many times, lenders do not want to pay those fees on foreclosed properties. Before you agree to pay the fees, be sure you estimate the cost because they can sometimes be high.

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