When a homeowner in Illinois cannot continue to make payments on the property, and the lender gives permission, he or she may sell the house for less than the amount owed to the mortgage company. In this case, you may be able to purchase the real estate for a very low price.
However, it is a bad idea to assume that you are getting a good deal just because it appears that the house is selling for far less than fair market value. According to Bankrate, there are several common mistakes people make when they purchase a short sale house. Here is how to avoid them.
Don't skip the research
If you were buying the house from an individual, you would get a disclosure statement, but the bank that now owns the house may not have to provide you with one. In that case, you need to check to make sure that any additions or renovations were completed with the proper permits and approvals, and that there are no other issues with the property that would normally be on a disclosure statement.
Don't make a bad investment
You probably know that you will have to do some repairs and renovations to get the house the way you want it. This is common after a real estate purchase. The issues with a short sale may go deeper than you think, though. When homeowners discover they are going to lose their house to the lender, they often stop taking care of the property. They may even damage or sabotage it.
Don't ignore the facts
You will need to have a home inspector come out to inspect the property, and this is a good time for you to learn just what you might be getting yourself into. Most home inspectors welcome questions and are willing to go into detail about the problems they uncover. Ask the inspector about repair estimates when he or she goes over the list with you. Even if you love the house, if you see that it will be too costly to fix, you may need to walk away.