Provided via Steve Harney "Keeping Current Matters" Blog Oct. 21st 2013:
WATCH OUT! -
Buying a foreclosed home may seem like a great idea for many buyers as you can usually get them at a DEEP discount, however like mama always said, "If it seems to good to be true, it usually is!"
Foreclosures can in fact be great deals IF you are willing to make an investment of time and money for improvements. Most foreclosures are dilapidated and need thousands of dollars worth of work...not to mention what also might be hiding behind the walls!
Here's a list of 10 Hazards to Look For When Buying Any Foreclosure:
<!--[if !supportLists]-->1. Destruction of Property – A sad truth about foreclosure properties is that they have often been purposely destroyed. Sometimes the homeowners do this out of frustration over losing their homes, or out of simple carelessness when they realize their home is irretrievably gone after too many missed mortgage payments. If the homeowners have not destroyed the property themselves, there is also a chance that the home has been vandalized by other people after left sitting empty.
<!--[if !supportLists]-->2. Poor Maintenance – If homeowners were unable to afford their mortgage payment, they almost certainly were unable to perform routine maintenance on the property. Problems can be as minor as a few leaky faucets or as major as damaged roofing or central units.
<!--[if !supportLists]-->3. Unclean – A house being left unoccupied for a significant amount of time can mean it will be unclean, either through neglect on the part of the former owners or normal depreciation as the property is left uninhabited. Depending on how long it was left and what condition it is in there may even be inspects, rodents or termites to deal with especially if the utilities have been off.
<!--[if !supportLists]-->4. Undesirable Renovations – Sometimes homeowners were in the middle of a renovation when they lost their ability to pay their mortgage, so you can wind up with a half finished project on your hands when you purchase the property.
<!--[if !supportLists]-->5. No Electricity – There is a good chance the electricity will be off in the foreclosed home, so you will have a hard time seeing what you are buying. Depending on the weather it may also be very hot or very cold in the house, and vacancy can take its toll on appliances left behind.
<!--[if !supportLists]-->6. Personal Property – Many homeowners leave items behind, either because they now have no place to put them or because they were locked out of the house before they could retrieve them. You will now be left with the job of disposing of these items if you decide to purchase the property.
<!--[if !supportLists]-->7. Lack of Landscaping – More than likely, nobody has been maintaining the lawn of a foreclosed home. You may have a yard full of dead grass or a lawn so overgrown it seems like a jungle! Your foreclosed home will almost certainly require some degree of upkeep when it comes to to the landscaping surrounding the structure.
<!--[if !supportLists]-->8. No Disclosure – Because the owner of the property is a bank and the bank has not actually lived in the house, they have no idea what problems or issues there may be in the home and they have no obligation to tell you even if they did. You will have to get your own home inspection done to uncover potential issues.
<!--[if !supportLists]-->9. Stripped Bare – You may find your new foreclosed home completely stripped of appliances, copper piping, and anything else that might be worth money. Many times the previous owners do this to try and make back some money on their lost home. Other times, the home was broken into and robbed after the previous owners left.
<!--[if !supportLists]-->10. <!--[endif]-->Judgments and Liens – Foreclosure properties can sometimes come with titles encumbered by judgments or liens that you may have to pay off to close on the deal. Also note that in some states the owner may have "The Right of Redemption" where they can purchase the property back within a certain time frame following the foreclosure process.
Sean S. Williams
Licensed Broker, Realtor®, ABR®, e-Pro®
1st Time Buyer & Relocation Specialist
of Louisville, Kentucky
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