Most probably, foreclosed homes were given up due to the inability of the occupants to make mortgage payments, so the lender will get the power to use the property as collateral. Foreclosures are unbearable for any homeowner, but buying a home in a foreclosure is a desirable scenario to future buyers.
Keep the below things in mind before buying a foreclosed home,
1. Existing Conditions
If the original owners were unable to invest in regular maintenance, which could be anything from plumbing, structural, to electrical issues, the new homeowner must deal with these issues. Beyond the existing condition of the home, sometimes the property needs new landscaping and sod, as plants could be dead or overgrown.
If you don’t maintain your home or set unoccupied for a long period, the property could have incurred some vandalism. There will be lots of maintenance issues, like cleaning the gutters, clearing debris off the roof, cutting back overgrown vegetation, and sealing tile in showers and tubs. The cheap repairs, like using duct tape or plumber’s putty over a leaking pipe or wrong method of wiring a fan can lead to huge problems like mold or fire hazards, which may require costly fixes down the line. It could be challenging for new homeowners to deal with broken windows, graffiti, and other issues.
3. Lack Of Seller Disclosures
The seller will not have personal knowledge about the issues of the home because the creditor owns the foreclosed property. So home inspections become very important at this point. For buying a foreclosed property make sure you hire a very credible home inspector so that you can get an accurate report of issues with the property.
4. Tough Competition
Investors put in cash offers for foreclosed properties, because these properties are listed at an attractively low price, they can sell quickly. So the competition will be really tough in the market.
Before making any offers, do your thorough research about the location and how much you’ve to spend for renovations and updates. If you’ve never completed major renovation, consult a trusted expert.
Do a full property inspection with the utilities on. If you’re buying a foreclosure, check whether the home’s been properly winterized and you can turn on the furnace if needed. Sometimes you need special access to turn the utilities on, which costs you a lot of time and money.