“Buying a bank-owned home gives you the opportunity to enter the market at a very low price level,” says Dorcas Helfant, a past president of the National Association of REALTORS®. “You can find terrific values among foreclosures, especially if they're not in too bad shape. But, remember, these houses are discounted for a reason.”

Today, many folks are considering jumping into the "investor" game for the first time because of all of the news about a glut of foreclosures on the market.  However, it is important to consider the following.

1.  Foreclosures are usually sold as-is.  Most of the time the lender will not be making an upgrades, etc in order to correct any deficiencies.  Ensure you plan for this in your budget. 

2.  A home that has been vacant for a long time can mean additional problems.  Often times foreclosures have been vacant for many months.  During this time utilities may have been shut off.  Homes without electricity, gas or running water can deteriorate quickly.

3.  What is the age of the home?  Older homes may have obsolete systems that need to be replaced or brought up to code.   Again, a hidden expense could be lurking.

4.  Sometimes you can judge a book by its cover.  If the home looks neglected on the outside then you should know it is probably in need of hidden repairs.  Go with your gut.  If there is exterior evidence of damaged shingles, cracked windows, or cracked caulking then you can probably bet there has been water penetration and further damage.  

5. Many times fixtures may be missing.  Unfortunately, many distressed homeowners decide to remove everything of value in a home when they leave.  This can mean you will be facing the expense of replacing light fixtures, appliances, plumbing fixtures and even flooring.  Buyer beware!

6.  Get an inspection.  A licensed inspector can help you uncover these hidden defects and help you accurately estimate the cost of any repairs.   They are also aware of current code requirements and can help you save a bundle in the long run.

Posted by Sammy Gardner on


Email Send a link to post via Email

Leave A Comment

e.g. yourwebsitename.com
Please note that your email address is kept private upon posting.