What You Should Know About Buying A Foreclosed Home
Are you a risk taker? Remember with a foreclosed home, you are purchasing the property "as is," which can open your pocketbook to costly repairs. Unlike a new or used home, you will not be given a Seller's Disclosure that provides a full record on the physical problems and defects on the property.
Foreclosed homes do not come with any warranties, and often are not even available for inspection before purchase. In many cases, foreclosed homes are poorly maintained or intentionally damaged and could have defects. Hidden defects behind the walls may include leaking water, rot or mold. You could end up with big repair costs to get the home back in a livable condition.
Do you have extra money to fix up a foreclosed home? Furniture and window treatments could be the least of your worries as you may be dealing with major repairs behind the walls, hidden defects, big ticket purchases to replace missing appliances, damaged fixtures, stained carpet…the list could go on and on. Also, banks are hesitant to approve home improvement loans, so getting funds for needed repairs can be tough.
It's Your Responsibility
You'll need to do a title search as you'll be responsible for any taxes, liens or second mortgages still on the property. If a bank has not begun formal foreclosure proceedings, you may have to evict the foreclosed owner or tenant yourself. Buying a foreclosed home is not for the faint of heart.
Time Is Money
Buying a foreclosed home requires patience as the process is complicated and time consuming. Are you prepared to submit multiple offers on foreclosed homes and waste valuable time in your home search, wait on a bank to decide when and "if" you will close on your foreclosed home, or spend time working to get the home move-in ready for you and your family?