Sometimes, prospective buyers have to get creative to find great deals, and a foreclosure could be just that. Saving money could be easy when looking at these types of distressed properties, but the costs could also add up rather quickly.
Therefore, homebuyers should do some quality research ahead of time. A property inspection is vital before closing on a foreclosure, and the previous owners often leave a big mess for the next residents to clean up.
Plan ahead when buying foreclosures
A foreclosure isn't like other homes. The real estate process is typically different from more traditional sales, according to Bankrate.com. There is usually only one real estate agent, for example. The finances of the new buyer may be looked at closely as well.
"Buying a foreclosure is definitely a bit of a grind. It's not easy," Robert Jenson, owner of the Jenson Group at Re/Max Central in Las Vegas, told the news source. "You're getting fantastic pricing, but sometimes it takes going through a lot of houses and writing a lot of offers to get the home you want."
However, that process could mean that the buyer is getting a great deal and has the opportunity to end up with an ideal home. First, they should be careful about any potential problems in a house. A home inspection is crucial at this point, so the attractive pricing doesn't let someone overlook serious flaws.
Most foreclosures are priced in relation to comparable homes in the area, Bankrate.com noted. That means buyers should do research into the neighborhood before making an offer. In addition, foreclosures are typically sold in their current condition. That means it is on the buyer - not the seller - to cover repairs.
Jenson told the news source that if a home is listed at $200,000, but there are roughly $15,000 worth of repairs such as paint, carpet and other damage, odds are that the seller won't drop the price if comps are at the same point.
Take advantage of a home inspection
Even with the risks, a foreclosure could be a great deal for many people. However, a property inspection can make it a safer bet. Taking the time to have this completed before buying can inform house hunters about any hidden problems, or point out which foreclosure has less risk due to fewer hazards.
One concern to watch out for is mold, according to Popular Mechanics. Homes in warmer climates are more likely to develop this problem, due to the greater humidity than other regions. Small growths need to be caught early, so they don't turn into a serious threat. However, in some cases mold is building up out of sight, like behind a wall. This is one reason why a home inspection is so important. A licensed professional is able to figure out where these types of hazards are forming.
Additionally, some foreclosed owners tend to loot their own properties before leaving, the news source noted. Everything inside the house is up for grabs if this happens, from ceiling fans to toilets and even piping. A property inspection before buying a foreclosure is crucial for finding damage caused by the previous resident.
Neglected maintenance is also a big hazard. California-based Realtor Mike Novak-Smith told the news source that most regular maintenance stops right alongside the payments. One area that often takes a hit is the heating system, which usually requires a great deal of upkeep. Also, painting goes undone and roof leaks are left to worsen.
For any prospective buyer of a foreclosure, diligence is key. A home inspection is a must before closing, and with proper research great deals can be found.