When looking to buy a new home, many people wonder about foreclosures, or homes where the lender has defaulted and the house is now owned by the bank. These properties can mean significant opportunities for both homeowners and as rental properties. However, there are a few key things to keep in mind. Here are 4 tips for buying a foreclosure:
- Use an agent – Having a real estate agent involved with foreclosures is essential. These transactions are complicated and require a skilled agent with experience in dealing with foreclosure properties.
- No disclosure – Foreclosure sales are often done with no seller in the picture at all. This means that information about the home or neighborhood is not provided. It will be up to you to learn as much as possible about the property, even checking public records.
- The bank – The bank acts as seller in these situations and they have their own process and timeline. They can be difficult to work with and may include provisions that allow them to back out at any time. Hence, the importance of tip #1!
- As Is– Keep in mind that these properties are often abandoned and stripped bare. The vacant home may have been targeted by thieves looking for copper lines, air conditioning units or more. Depending on how long the home has been empty, the lack of heating and/or air conditioning may cause damage to some of the homes features such as drywall.
Buying a foreclosure can be a great investment for the right person. It can also be a process full of surprises for the inexperienced buyer. Be sure to find a knowledgeable agent to help you decide if it’s the right fit for you.