September 21 2010 (Chris Moore)
There’s nothing new about the fact that there’s a lot of foreclosed homes on the market right now. In fact, an ever increasing number of homes on the market have been foreclosed and that number is expected to continue to rise for quite awhile. Although foreclosed homes often present a great opportunity for buyers, they also come with great risks and consequently are not always the best option. There are many things that buyers need to consider before they decide to make an offer on a foreclosed home.
The key to remember when considering the purchase of a foreclosed home is that there is critical information that you need to obtain that could keep your potential for savings thousands of dollars on your home purchase from turning it into a nightmare. A little bit of pavement pounding and a few dollars upfront will tell you if that foreclosed home is in fact your dream home.
One of the first issues that buyers need to deal with is title work. Buyers of a foreclosure home should get a title check even if the foreclosure buying process doesn’t account for one. There may be additional liens such as second mortgages and tax liens still attached to the property and passed on to the new buyer that they will be responsible for.
Get the home inspected. Inspections are a great way of finding out the accurate condition of foreclosed homes. Some foreclosure properties are open to inspections, but others are not. Buyers need to be aware that many foreclosed properties are not in the best condition, and most of them are sold “as is.”
Since foreclosed homes often remain abandoned for long periods of times before they get sold, some may be victims of pest infestation, mold growth, and vandalism. Therefore, it is highly recommended that you always get an inspection done on any property you plan to purchase. If an inspection is not possible, you’re opening yourself up to any number of problems that may not be visible from outside the house.
Another thing to consider is that a property disclosure statement is not always required, it all depends upon the state the foreclosure property is in; this in another reason why an inspection is even more necessary. It is recommended that buyers check everything from plumbing, electric wiring, foundation, etc.
With a clean title and a good home inspection, you’ll have a pretty good idea if your purchase of a foreclosed home is a good deal or not. Depending on your situation there are others things to consider and buyers need to do their homework and research as much as possible before they make an offer on a foreclosed home. Finding a well maintained home or one that just needs cosmetic work that is tens of thousands of dollars under market might be a good deal.
They must also realize that foreclosed homes are not always great deals, and often times, they come accompanied by a set of problems.