As one of the states hardest hit by the economic crisis, unemployment, personal bankruptcies, and investment and pension losses in Florida have resulted in hundreds of thousands of homes and condos coming onto the Florida real estate market at bargain prices.
But some lawyers and real estate advisors are warning people, Canadians included, against buying foreclosed properties in the state. Shoddy process has meant that many title transfers are not legally valid, leaving prospective property owners with paperwork that may not be worth the paper it's written on.
Diana Swain travels to St. Petersburg, Florida to meet some Canadians who've been caught up in this frenzy, and goes behind the scenes to find out what's gone wrong within Florida's real estate system.
What you should know about buying foreclosed property in Florida
This list was excerpted from a newsletter by realtor Wayne Levy at Florida Home Finders of Canada
A foreclosed property, like many properties in Florida, is sold in an "as is" condition. Sometimes these properties are vandalized and stripped by their former owners before they leave.
In some cases, the homeowners association could be bankrupt or severely under-funded if there are too many foreclosures in a given development.
Short sales can be a minefield of problems. In many cases, the proposed purchase price might not be enough to cover any possible liens on that unit.
There could be a several month to a year or more delay when dealing with the bank. Often times, the bank will place an artificially low price on a property in order to garner multiple bids, which drags out the sales process, leaving you totally in the dark and frustrated. Inaccurate documentation has led to numerous lawsuits by homeowners who have been foreclosed on.
Some title insurance companies are now making it very difficult, if not impossible, to write a title insurance policy for any foreclosed property connected to any of the now-tainted banks, making these foreclosures impossible to close.
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