Tips for Purchasing a Foreclosure

by Paula Burton 10/17/2021

Photo by Alex D'Alessio on Unsplash

Purchasing a foreclosure property is a great opportunity to own a home at an extremely affordable price. While many people successfully buy foreclosed homes and are happy with their decision, before making this large financial commitment, it’s a good idea to understand what you might be walking into—before you buy.

Homeowner Left Home in Disrepair

In many foreclosure situations, a home is left in poor condition. If the homeowner couldn’t keep up on their mortgage payments, there is a high probability they’ve neglected general upkeep and maintenance too. Common problems associated with foreclosed properties include:

  • Improvements made on the cheap and not up to code.
  • Garbage or other forms of waste strewn about the home.
  • Odors from rotting food left in an unplugged refrigerator.
  • Termites, rodents or other pests scurrying about.
  • Mold conditions due to leaky roofs, burst pipes or drippy plumbing.
  • Appliances or fixtures intentionally damaged.
  • If a home needs significant repairs, even if they're well-priced, it still might be a poor investment.

    Vandalism has Occurred

    When a home is left empty for a prolonged period of time, unfortunately, vandals or squatters sometimes identify these homes and enter them illegally. Problems to consider include:

  • Broken windows, doors and other areas of the home.
  • Graffiti on the interior and exterior of the house.
  • Evidence of drug activity or unsanitary waste left behind.
  • Stolen items including fixtures, appliances, copper piping or other items deemed to be of value.
  • Added up, these types of events might negate any savings you'd get on a foreclosed price.

    Expensive to Make the Home Habitable

    Even if no disrepair or vandalism is present and the home looks to be a good investment, it’s a smart financial strategy to tally up the general costs of any repairs and cleaning needed to see if these expenses outweigh any savings.

    For instance, if a prolonged leaky roof created a serious mold situation or structural problems, you could be talking about thousands of dollars for the cleanup and repair alone. Any major repairs necessary to get the home up to living conditions may not be worth the investment, especially when you add in other minor repairs or desired cosmetic work.

    Difficulties with Lenders

    In foreclosed homes, lenders sometimes won’t want to give a mortgage to borrowers looking to purchase what they deem as a risky property. They’ll look at appraisals and, if it falls below the purchase price, they may deny you a mortgage. You also might encounter problems with the bank (or lender) currently in possession of the house. 

    Always do your homework. Understanding the pitfalls associated with buying a foreclosed home will help you to make an educated decision. Hire a qualified inspector to carefully comb through the home and talk to neighbors about the house’s history. Once you gather solid information, you can better determine if purchasing a foreclosure is a smart investment.

    About the Author
    Author

    Paula Burton

    Premier Top Agent Producer Specialties: Buyer's Agent, Listing Agent, Relocation, Consulting I have enjoyed many wonderful years working with great Sellers and Buyers in servicing their real estate needs and making their dreams come true. And I want to take a moment to thank them for their business and putting their trust in me. In 2017 so far, I have produced 29 Listings and Sales closed, the highest price being $700,000. In 2016, I produced 32 Listings and Sales with the highest priced property at $690,000. In 2015, I produced 39 Listings and Sales with the highest priced property at $530,000. In 2014, I produced 32 Listings and Sales with the highest priced property at $523,000. Over the years, Listings and Sales have been from 30-43 properties a year up to $775,000. My seasoned experience as a Top Producing Agent gives me the knowledge, understanding, and professionalism to help service my clients in the best way possible in their best interest. We've become friends during the process and we always maintain a great relationship afterwards. Because of my strong work ethic in providing the best professional service for my clients, I have been complimented by receiving many referrals from them to help their families and friends in selling their properties and buying their next home, and in making their next move an enjoyable experience. I am affiliated with Century 21 AllPoints Realty in Southington specializing in central CT and having the ability to cover the entire state and out of state. I have over 25 years of professional experience winning many awards being the top producer in Southington over the years and the Century 21 top producer in the state of CT and in the Northeast region. I am a member of the Centurion Honor Society for consistent high top production for the past 14 years. I am a member of the Greater Hartford Board of Realtors, Vice Chair in 2016 of the Legal Awareness Committee, and on the Board of Professional Standards, and Chairwoman this year in 2017. I was previously affiliated with Calcagni Real Estate, and Prudential CT Realty (now Berkshire Hathaway) also achieving top production awards, adding to my professional success and expertise. I am excited about the real estate business and find great joy in helping my wonderful clients. Century 21 AllPoints Realty has 9 offices in the state of CT with Southington being the headquarters. We have been the top real estate office in Southington for the past 14 years in production, numbers of properties listed and sold. In the Century 21 network, my company has also been the top Century 21 company in the state of CT for the past 15 years, and one of the top Century 21 companies in the Northeast Region. We are a locally owned family business for the past 30 years with involvement in the local community and state, and have the selling power and outreach of a large global company - the best of both worlds and the best advantage for our clients. I myself have resided in Southington for many years, enjoying the wonderful community in the center of the state with convenient access to all the major highways. In my free time, I enjoy getting together with friends and family and clients for a cup of coffee, glass of wine, or a leisurely lunch or dinner. I love relaxing walks, exercising, and my yoga classes! I relax with a good movie, cooking, and I love travelling, I look forward to meeting with YOU ready to help fulfill YOUR real estate needs and dreams! Please contact me at any time!