The adorable, reduced-price cottage or stately manor you’ve been eyeing might have a few secrets. Foreclosed properties can be a great deal for the new buyer. They aren’t without their worries, though.
Most foreclosed homeowners aren’t happy about giving up the place where they hang their hat. Some of them stop maintaining the home or worse – sabotage it for future owners.
Here’s what you should expect from a foreclosed property and how to protect yourself.
A Home Inspection is Your First Line of Defense
Every real estate sale should merit a home inspection, but foreclosed properties might have more secrets than the average house. Jean Nayer for Bob Vila lists it first on the list of things to do when buying a home that’s been seized by the bank.
Unlike the appraiser, the certified home inspector works for you. They have your back and best interest at heart. They won’t shine up the report to help the agent make a sale or to coax funding through the underwriting process. Sometimes, that equals an unpleasant report, but the sooner you know about material defects, the better.
Foreclosed Homeowners Lose Interest in Maintenance
Chances are if a home is foreclosed the owners have been in dire financial straits for a while. Maintenance might suffer, which means everything from the roof to appliances could be in need of professional attention. Your home inspector will get to the heart of whatever plagues the property.
Investopedia says cleanliness may also be an issue. A dirty home can attract pests such as insects and rodents. Fortunately, even the dirtiest conditions can often be cleaned and exterminated.
Don’t Count on Utility Service
It may seem like an obvious point, but your inspector can’t test many of the home’s systems without electricity, water and perhaps gas. What’s not so obvious is that utility companies may have long since shut off the supply, and the bank that owns the house might not turn them back on for your benefit.
Talk with your real estate agent about temporary utility service restoration so your inspector can do a thorough job. They may recommend contacting the utility companies, or they may contact the owner on your behalf.
Your inspector can tell you if defects need minor repairs or if they’ll require a team of contractors.
Beware Owner Sabotage
Most people who lose a home to foreclosure aren’t happy about it. In serious cases, homeowners have been known to damage the property, which sabotages the bank’s ability to recover their losses. Unfortunately, the more creative the damage the less likely you’ll want to move in.
Investing Answers suggests that the house inspection cost is well worth it. Here are some creative things they say foreclosed properties have suffered:
- Concrete in plumbing fixtures and drains
- Impact damage to nearly any surface
- Fixtures such as cabinets removed
- Booby trapped doors
- Stolen copper pipe and wiring
- Stolen HVAC units
A foreclosed home can be a great deal, but let the buyer beware. Unlike a typical home sale, the former owner is not involved in the process. They have just lost their residence and have nothing to gain from the sale. Home inspection services step in on your behalf to let you make the best decision.
When you’re ready to take the next home buying step, Hire an Inspector is ready to help. We’ll find a trustworthy home inspector near you.