Are you sure you want to buy that foreclosure property on Maui?
Some buyers get the impression that all foreclosed homes are a screaming deal, and set their sights on only REO bank owned listings as a way to buy a home on Maui. While there are some good offerings, don’t just limit your search to this kind of property. Sometimes CHEAP can be VERY EXPENSIVE.
First time buyers and inexperienced home owners will sometimes get in over their heads once they are committed to the sale, and find themselves with no where to turn. More experienced buyers, such as investors and building contractors, are usually more prepared for what to expect, and they have the ability to overcome the downside of these distressed properties.
A bank owned home in Paia Maui
5 reasons NOT to buy a foreclosure property on Maui:
- No seller disclosure: A foreclosed home typically comes without a legally required seller’s disclosure which states what repairs have been made and what is defective. You’ll have to discover the defects on your own and be prepared to deal with whatever comes up.
- No survey: You’ll be paying for your own survey if your lender requires it. If it’s not required, then you’re taking your chances that the property boundaries are where you think they are. Get your own survey and have peace of mind.
- You might have to pay cash: If the home is in serious disrepair, many banks and mortgage companies won’t consider it worthy of a loan. As a cash buyer, you’ll have no contingency of getting a loan, and no lender ordered property appraisal. It would be a good idea to pay for your own appraisal to know the real value of the home.
- No access to property: The mortgage holder can wipe out an existing easement. A lender has to consent to an easement agreement between two properties, and it needs to be recorded on the deed of both properties. It’s something to keep in mind.
- Non-judicial foreclosure: The previous owner can challenge a non-judicial foreclosure and win, and you could be left without a home, and without compensation, even if you’ve spent money on the house and improvements. This is the big one to watch out for as we move forward with the next wave of REO homes on Maui.
Why not be a little more flexible and see what else is on the market? Search the Maui MLS here.
68 Puu Koa Place, Haiku Maui – NOT a foreclosure!
Knowing that the home you’re buying comes with clear title and no hidden horrors is a good feeling. Many sellers are very motivated to move on, and just waiting for a reasonable offer. Team up with a local agent and let them help you determine which listings are the best deals for your needs. You’ll be happy with the results.