There is no doubt about it – purchasing a foreclosure can be a great way to save a whole lot of money on a home. Furthermore, contrary to popular belief, many homes that are in foreclosure are still in excellent shape. Nonetheless, there can be a few pitfalls along the way when purchasing a foreclosure. Therefore, it is a good idea to watch out for these five things when buying a foreclosed home.
Check on Liens
If the owner of the home has defaulted on the home mortgage loan, chances are good that there are liens on it as well. Therefore, you should be sure to find out if there are any liens from unpaid tax bills, repairs, association fees or any other organization that might have put liens on the property. Having liens doesn’t necessarily mean you shouldn’t purchase the property, but you need to keep these liens in mind when determining whether or not you are really getting a good deal.
Procedural Differences
Purchasing a foreclosed property involves following different procedures from the standard home purchase. As such, you don’t enjoy the same safeguards and other protections that are found with a regular home purchase. Furthermore, the purchasing process is different with foreclosed properties. In fact, in many case, you will need to have proof of financing as well as 5 to 15 percent of the purchase price to provide as a deposit. Therefore, you need to be prepared to come up with a significant amount of money within a short period of time if you plan to purchase a foreclosed property.
Dealing with Unwanted Tenants
In some cases, the previous occupants of foreclosed properties will be reluctant to leave. In this case, you might have to go through the trouble of evicting them. While the law will be on your side in this situation, it can be a very stressful experience.
The Condition of the Property
While there are plenty of foreclosed properties that are in great shape, some are in less than desirable condition. In fact, some previous owners will purposely damage the home simply out of spite. Since the properties are generally sold “as is,” you could potentially find yourself in a bad situation when purchasing a foreclosed property. To protect yourself from this possibility, you should be sure to get a thorough inspection of the property before you make a purchase.
Foreclosed Property Listings Can Be Found in Many Places
The best way to find out about available foreclosures is to contact a Broker or Realtor, but you can also obtain lists of foreclosures from a variety of different sources. These include the REO departments of various banks, the US Marshall’s Office, the VA and the IRS. If you wish to purchase a HUD foreclosure, however, you will need to go through a Broker.
About the Author: Brian Kinkade is a broker and team lead with Brokers Guild – Cherry Creek Ltd, one of Denver’s fastest growing full service Denver real estate firm. Brian’s team of Internet savvy agents service the Denver Metro area while specializing in Denver luxury homes, Colorado horse property and International sales. They invite you to visit their advanced real estate website today to search for homes, gather local information, and learn about Denver neighborhoods. Brian and his team are standing by and ready to assist with your home purchase, property sale or relocation needs.