Buying A Power-Of-Sale Property: Things To Expect As A Prospective Buyer

If you are in the business of buying homes at a low price to relist them at a higher price point and make a profit, buying power-of-sale homes can be a good way to get really nice properties for an inexpensive price that is well below market value. Power-of-sale homes are homes that are being sold by the mortgage holder because the person who was supposed to make the payments on the property did not. If you plan to buy one of these properties in which there has been a default on the mortgage, there are a few things to expect. 

Expect the house to possibly still be inhabited. 

Most buyers expect that a house will be empty when they buy it during a power-of-sale liquidation, but that is not always the case. Most properties that have this kind of contract state the mortgage holder can sell the property as soon as the mortgage gets to a certain past-due status and eviction may or may not have already taken place. Of course, the occupant will eventually have to move and the mortgage holder will usually make sure of that, so it is really nothing to be concerned about if you are considering purchasing a property that is still lived in. 

Expect any repairs to be left up to you. 

When power-of-sale properties are sold, they are listed just as they are. The primary interest the mortgage holder has is in getting their money back; they may not be concerned with making a profit. The house may need repairs, but this will be something left up to the buyer in the majority of cases. 

Expect to see the transaction take place rather quickly. 

Power-of-sale property holders are usually ready to get the property sold and out of the way as fast as possible. Therefore, it can take a little less time to get through the buying time than usual. You may not be left waiting for things like home inspections to take place or meetings with attorneys to draw up contracts on the purchase. 

Expect that a sale can stop at the last minute. 

It is not uncommon for mortgage holders with power-of-sale properties to give the actual owner all the way up until the last minute to pay what they owe and get their account back in good standing. While this rarely happens, it is possible for you to be prepared to buy a home and the owner to step in and pay what they owe at the last minute, which would cease the sale. 

For more information, contact companies such as Real Estate Investment.