Many people think buying a foreclosure or short-sale property is a savvy real estate move. The common misconception is that a foreclosure property is a diamond in the rough real estate deal. But foreclosure properties come with many strings attached. All that extra baggage can make the buying process tricky and more expensive than you think. So if you are considering buying a foreclosure property, make sure you are prepared for some of these common pitfalls before the buying process starts.
- Damage: Foreclosure properties are often not well maintained. It’s not uncommon to find significant damage throughout the property. Be prepared to fund renovations to make the property livable as soon as it’s yours.
- Problems with past owners/tenants: One of the most significant issues you may face buying a foreclosure property is dealing with previous owners. Your ownership agreement isn’t with them but with the bank or lender that took the property away because they weren’t making their payments. Many people struggle with this and will continue to think of the property as theirs, even after being removed. As a result, they may damage the property before leaving or continue to come to the property and harass you.
- Left behind items or stolen valuables: Another issue that often comes up with foreclosure properties is the previous owners leaving behind their property. You may have to spend a significant amount of time removing personal items. Sometimes previous owners also strip the home of any valuable items like appliances, wiring or fixtures, which you will have to replace.
- Financing issues: Buying a foreclosure or short sale property is not a simple sale transaction. You will want to work with a trusted loan specialist or mortgage lender who can walk you through the financing, but you’ll still need to be prepared for setbacks and for the process to take some extra time. You may have to coordinate with the bank that foreclosed and other lenders.
- Utility issues: Foreclosure properties often sit vacant for some time before being sold. The utilities may be turned off, or bills may be owing because the previous owners stopped paying. Be prepared to hook the utilities up again, taking time and money.
Many people think that buying a foreclosure property is a great way to save money because the bank or lender wants to get rid of the property. But it’s not always a smooth transaction. You may save money on the house’s overall price, but you will need to plan for some of the extra expenses that may come up. Consider working with an experienced foreclosure real estate agent who can help guide you through the buying process.
You should never skip a home inspection, and this is especially true if you are considering buying a foreclosure. A home inspection can help you avoid the worst surprises. Don’t rush into purchasing a home that might have hidden issues. An inspection by a knowledgeable, reputable and independent third party is a must in this situation. Want to learn more about the importance of a home inspection? Visit our website: https://rvminspections.social5.net/
