Sometimes buying a foreclosure can save homeowners money, but sometimes it’s a total disaster. The rule in real estate is always “buyer beware.” When homeowners are going through the foreclosure process, they typically don’t have money for home repairs. Neglect can lead to serious damage that may not be apparent at the time of sale. Sometimes homes sit vacant and uncared for, increasing the chance of plumbing, electrical, even structural issues.
Here’s how to tell the difference between a bargain and a money pit.
Pay for an Inspection
Sometimes buyers are so excited about a home’s low price, they want to jump on it before the deal gets away. If the home looks rough, they reason they’re saving enough to cover any repairs that aren’t visible to the naked eye. A licensed home inspector can give you detailed insight into everything the home will need to help you budget for repairs, negotiate a better price, or walk away from the deal.
If the utilities are turned off, negotiate with the lien holder to have them turned on for inspection. You’ll most likely have to pay for the service, but if you don’t, the inspector can’t test plumbing, heating and air conditioning, or electrical systems.
Look Up the Home’s History
Online resources can tell you when the home last sold and what was paid. Compare photos from before the previous owners to the home’s current condition to see how it has changed. Your local land records office has detailed information on the home’s purchase price. If owners took out a loan for renovations or repairs, you may be able to find out who did the work and how recently it was completed.
If you’re buying the home from the bank, you can be sure of obtaining a clear title. If you’re buying it on the courthouse steps for cash, do your research to make sure you’re not purchasing a property with liens against it.
Check for Big Problems
Look for cracks in the foundation, a roof that need to be replaced, or other structural issues. If the home needs major repairs, make sure there’s room for them in your renovation budget. Sometimes a home that seems like a deal ends up costing more to repair than just paying for one that’s already in good shape.
If a home needs mostly cosmetic work, you can save a bundle, especially if you can do some of the work yourself. If you’re looking for a bargain anywhere on the Alabama Gulf Coast, we can help you make the best investment decision. Contact Kris Powell to find out what’s available today.