5 Common Short Sale Risks — and How to Avoid Them

3. Deferred maintenance. Rules on disclosures vary from state to state, but in most cases, the seller will fill out a disclosure form listing everything he or she knows about the property. Unfortunately, this may not give you an accurate account of the home’s condition. Cash-strapped sellers have often deferred maintenance and repairs on the home, which could cause problems to be much bigger than they realize. The result: The buyer faces a mountain of maintenance tasks and repairs.The solution: Tag along on the home inspection. Come armed with a list of questions for the inspector about anything you’ve already noticed and speak up about anything that worries you.When the inspector notes a problem, ask how much he or she thinks it will cost to fix it, and double check that estimate when you get home. If the initial inspection discloses damage from termites or mold, it may also be a good idea to call in a specialized inspector to determine the full extent of the damage and what it will cost to repair it.4. Incomplete information about the property. Because disclosures on bank-owned properties are different, some buyers purchase a short-sale home only to find out later that it is on a flood plain or that the empty lot next door is about to become a minimall.The solution: Do your due diligence. Check FloodSmart.gov to make sure the home isn’t on a flood plain, and consult the local planning department to make sure the area isn’t zoned for development and that neighbors aren’t permitted to build right up to your property line.