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Foolhardy buyers?

Posted by Scott Van Voorhis March 7, 2013 06:16 AM

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OK, when faced with a tough real estate market, don't make it worse and do something really stupid.

But an increasing number of buyers in Greater Boston are doing just that, casting aside common sense in order to nab that increasingly elusive middle-priced home that doesn't need huge amounts of work.

The number of homes for sale across the state is down by a quarter from last year, with no signs of relief in sight, even as buyers flood into the spring market.

That has left many buyers increasingly frustrated, battling against multiple offers on any home that doesn't need a complete overhaul and is reasonably priced.

And that is prompting some buyers to do some incredibly foolish things.

As a result, buyers run the risk of losing their deposits, or worse, winding up with a home with hidden structural and repair issues that could cause lots of misery down the line.

"We are seeing them do whatever they can do to get the property under agreement," warned Sam Schneiderman, president of the Greater Boston Home Team.

So what are buyers doing? For one, they are waiving mortgage contingencies, putting them at risk of losing their deposits if the bank doesn't come through

Sellers are certainly delighted with this, but it is very bad news for buyers.

Given that banks are still rejecting mortgage applications right and left over small credit blemishes, there's a good chance - maybe as high as 40 percent - that your gamble could backfire. Then could find yourself out anywhere from several hundred to a couple thousand dollars, with no house to show for it.

But that pales in comparison to the risks some buyers are taking waiving home inspections.

Given all the old, half maintained homes out there in the Boston area, you could easily get stuck with a problem that will cost you tens of thousands or more to fix.

If you are starting to feel desperate, the last thing you should do is double down.

This blog is not written or edited by or the Boston Globe.
The author is solely responsible for the content.

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Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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