Short Sales & Foreclosures

Short sales and foreclosures have become a popular option for home buyers looking for Laguna Beach real estate. With more and more households getting hit by the recession, the foreclosed homes on the market have more than doubled in the last few years. And it's not surprising why they're such a tempting deal: for a fraction of the market price, you get a perfectly good home in a nice neighborhood.

Of course, there's always a catch-more than a few buyers have walked away thinking they've scored a good deal, only to find out that they're saddled with more expenses than they saved. That's why your best bet is still to work with a Laguna Beach real estate agent to help you find the best homes. If you're considering a foreclosed or short sale property, here are some common pitfalls to watch out for.

Mortgage problems: Some foreclosed homes are actually on second mortgages tied to the former owner's first, or come with similar liabilities. It's all part of the package when you buy the property. So if a home goes for under $100,000, it's possible that you'll have to pay twice that at the closing table to actually own the place.

Building flaws: Short sales and foreclosures usually don't allow you to look inside the property or send an inspector to check for flaws. You may also not be able to request repairs or negotiate to split the costs. And considering the owners must have been financially challenged for the last few months, they probably couldn't afford the maintenance. Insist on having a peek inside, and decide whether the cost of fixing it up is worth the amount you'll be saving.

Title encumbrances: A title search is required for most Laguna Beach homes, but it's even more important when you're buying troubled property. A title company can look into the home's records and uncover any liens, restrictions, and flaws in the title. They can also offer title insurance, which keeps you covered in case one of the former owner's creditors comes up with a claim on the home.

Equity: The safest foreclosed homes are those that have a good amount of equity built up. Homes with little to no down payment usually have much lower equity, so make sure to take note of it in your title search. Look for Laguna Beach homes that have been lived in for two or more years-that's usually enough time to build good equity even with interest-only payments.

Again, the best way to get a good deal is to work with a capable agent. Not all agents are willing to take on buyers who want a short sale or foreclosed property, and those who do may not always have the skills needed to help you. Avoid problems by providing as much information as possible during the offer, and keeping regular contact with your lender and agent to make sure everything goes smoothly.