Things You Need to Know About Short Sale Inspections in Kansas City

Things You Need to Know About Short Sale Inspections in Kansas CityYou’re probably just a little giddy at this point. You’ve made an offer on a short sale property at a price well below the market value, and it looks like a sweet – and potentially very lucrative – investment deal. Still, there are a few things you need to know about short sale inspections in Kansas City before you take that final step.

Short sales can be a great boon for investors – or they can be a giant money sink. It’s up to you to do your inspection-related due diligence.

Don’t Neglect It

In their eagerness to finalize the deal on an affordable property, some buyers cut corners on the inspection or forego it entirely. This is a significant error. Often, sellers in short sales face financial constraints and may have neglected property maintenance for a considerable period. Some, in their frustration, may even have inflicted damage in an attempt to express their displeasure about losing the property. Therefore, an inspection is absolutely essential.

Even more crucial are the specialized inspections that many short sale buyers might overlook. You’ll require professionals beyond an inspector who performs a swift walkthrough focusing on plumbing and wiring.

For instance, you’ll require inspectors with specialized training to identify potentially costly issues such as concealed termite damage, mold problems, and/or underlying structural issues. It’s important to note that there are both highly skilled and less proficient inspectors for these specialized assessments. Therefore, be diligent in seeking recommendations and references.

Initiate It Early

Among the various considerations about short sale inspections in Kansas City, this one often sparks significant debate. Is it prudent to invest in inspections when the acceptance of your offer is uncertain? Or should you wait until the certainty of not wasting money aligns with the loss of bargaining leverage.

Many times, the buyer’s agent will request that the buyer is allowed to inspect the property after the lender’s short sale approval, thus allowing the buyer to back out if the inspection turns up too many troubling issues. The problem here is that, at this late hour, the inspection is sometimes rushed, and the buyer’s negotiating leverage has slipped away.

Short sales are usually done on an as-is basis, so there isn’t usually any chance to negotiate and figure repair costs into the sale price. Still, there is sometimes a slim chance for this. So, the best policy is to have inspections done early on.

Avoid Sole Reliance on the Disclosure

While sellers typically document every known issue with the property in a disclosure form, there’s often a tendency to downplay or omit problems, especially those resulting from neglect and abuse. Even with a seller’s attempt to provide an accurate and honest account, you may still lack a comprehensive understanding of the property’s true condition, given that the seller lacks the expertise of a trained inspector.

The solution to this dishonest- or inadequate-disclosure problem is for you to tag along on the general inspection. Ask the inspector questions about any problems you’ve already detected. And when the inspector discovers and notes a problem, ask him what it would take to rectify the problem. (This may point up areas and issues that require those specialized inspections.)

Additionally, it’s important to recognize that short sale disclosures may not cover significant issues external to the property – issues that could have serious implications for your investment. Discovering, post-purchase, that the property is on the verge of being situated next to a newly zoned commercial area or is located in a flood plain is not an ideal scenario.

A short-sale property can often be a sound investment, but it can also be a huge money sink. Just be sure to keep in mind these things you need to know about short sale inspections in Kansas City.

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