| There is more involved than what meets the | | | | home inspection, but you can't ask the bank to |
| eyewhen considering the purchase of a | | | | make any repairs to defects found or credit any |
| foreclosure | | | | money back for such repairs. Once you have a |
| Once the realm of only seasoned real estate | | | | contract, you can't get out of it because you |
| investors, the interest in purchasing foreclosed | | | | discovered a major defect and the bank refuses |
| properties has fanned out to a growing number | | | | to correct it. |
| of ordinary home buyers. As the sub-prime | | | | If you do your homework, however, and are |
| lending fiasco continues to push homes into | | | | smart about the whole thing, there are bargains |
| foreclosure and news stories appear everywhere | | | | to be found from time to time. Since you never |
| about the record number of them hitting the | | | | know what a property's true condition is by a |
| market, many prospective home buyers are | | | | cursory inspection, it makes sense to hire a home |
| eyeing these properties as a way to get a lot of | | | | inspector before you submit a purchase offer. |
| house for little money. | | | | That way you will know what repairs need to be |
| There seems to be a big misunderstanding by the | | | | made and you can then find out the cost to |
| public, however, about the value of homes that | | | | make repairs and easily determine if the asking |
| have been foreclosed. People tend to think that a | | | | price of the house is worth the repair expense. A |
| foreclosed home presents a bargain, especially | | | | lot depends upon if you are going to live in the |
| those who are looking for real estate investment | | | | house yourself or if you are going to flip it or rent |
| property. They think that they can buy a | | | | it. A foreclosure is much more risky if it is |
| foreclosure cheap, do a little fixing up, and sell it | | | | purchased for investment purposes than to live in. |
| for a hefty profit or rent it out or even keep it | | | | The more thoroughly the house is inspected and |
| for their own home, expecting to reap instant | | | | the neighborhood and market researched, the |
| equity. Well, it doesn't work out that way very | | | | easier it is to make a decision on whether a |
| often. | | | | particular foreclosed home is right for you. |
| Out here in the trenches of real estate, I have | | | | Remember, when a house has been vacant for a |
| been seeing an increase in foreclosed homes | | | | long time without regular maintenance, which is |
| dumped on the market and the number of people | | | | often the case, even a home inspector can miss |
| looking for such homes who are expecting to | | | | damage that is not apparent, but may be lurking |
| purchase one for pennies on the dollar. I have | | | | behind walls and floors. Leaking water, vermin |
| home buyer clients who specifically want to | | | | activity, and rot can occur in areas not visible to |
| evaluate only foreclosures or HUD homes, those | | | | even the most thorough inspection without |
| offered by the government, usually by a bidding | | | | tearing out walls. These latent defects can |
| process, because they want a house that they | | | | manifest themselves at anytime and cause |
| can buy cheaply and work on it while living in it. As | | | | extensive damage. Consider also that many |
| it turns out, most end up buying a conventional | | | | foreclosed homes were neglected by the |
| home once I show them a couple foreclosures | | | | previous owners, adding to the possibility of |
| and they begin to understand what they are up | | | | unforseen problems. I see this out here in the field |
| against. | | | | all the time. |
| Banks are not stupid. They know the value of | | | | If you are determined to buy a foreclosed or |
| real property and are not about to give it away. | | | | HUD home, do your homework. Work with a |
| It's an asset to them, not a liability. When they | | | | competent real estate agent and know the real |
| have to sell a home that they have repossessed, | | | | estate market, the condition of the property, and |
| they offer it at market value, not necessarily for | | | | the cost to make repairs. No matter what your |
| what is owed on the house. The first thing they | | | | objectives for buying a foreclosure are, get the |
| do is send a certified real estate appraiser to the | | | | facts. That bargain property could turn into your |
| property to determine a fair market price based | | | | worst nightmare. The old adage of "Buyer |
| on comparable homes sold in the area and any | | | | Beware" certainly holds true when it comes to |
| defects that may be present in the home. | | | | buying foreclosed property. I could tell you horror |
| Whatever figure the appraiser comes up with is | | | | stories. Stay tuned. I may relate a few in future |
| what the house will be priced at. And it isn't cheap. | | | | articles here. You can get some helpful information |
| It is true that many foreclosures are priced lower | | | | on the subject for free at one of my favorite |
| than seemingly comparable homes in a given area, | | | | real estate websites, . |
| but they are almost always in very poor | | | | There are going to be more foreclosed homes |
| condition, sometimes requiring extensive repairs. | | | | coming on the market over ensuing months and |
| And this is where the danger comes in. Foreclosed | | | | there will be some excellent pickings if you know |
| properties are sold "as is", meaning that when you | | | | how to spot and properly evaluate them. Move |
| buy the house, you have to take it in it's present | | | | fast when you do find one. You're not the only |
| condition, the way you see it. You can have a | | | | one eyeing that property. |