Foreclosed-upon properties have always offered great bargain-shopping opportunities, but recent allegations of improper banking procedures involving thousands of foreclosures coast to coast have increased the need for potential buyers to heed the age-old admonition of “buyer beware.”
“It’s a word that bears repeating: research, research, research,” said Angie Hicks, founder of Angie’s List, the nation’s premier provider of consumer reviews on home and property-related services.
Attorneys general in every state are investigating the allegations of flawed foreclosure paperwork that may have improperly evicted millions of homeowners who were delinquent on their mortgage payments. Other federal inquiries are beginning, as well.
“Foreclosed-upon properties offer buyers the chance to purchase homes they might otherwise not be able to afford,” she added. “But the pitfalls are many, and growing. So it’s more important than ever to really dive deep into researching whether that property is really available and its true condition and value.”
Consumers may find great deals on dream houses, but as foreclosure inventories of all types of homes grow across the country, Hicks said buyers need to be extra careful.
“Buying foreclosed property is neither cheap nor easy. If you stumble across a housing bargain that seems like a quick way to land a great home at an unbelievable bargain price, it’s probably too good to be true,” Hicks said.
Top Tips for buying foreclosed upon properties:
- Foreclosure laws vary among states, so don’t assume you know what you’re up against if you know one state’s laws but are buying in another.
- Get a fresh appraisal of the property you have in mind and compare it to other property valuations in the neighborhood to sure you’re home is priced correctly. Sometimes appraised values will be less than the asking price. Lenders won’t loan more than a home’s assessed value.
- Hire a professional home inspector to examine the entire house before you buy.
- Most foreclosed properties come “as is.” Some evicted owners will strip the house of items like doorknobs, pipes and appliances. Some may damage the home, as well.
- Check with your state Attorney General and local officials to determine if the property you’re eyeing is clear of any other legal entanglements, including unpaid liens that you may assume upon purchase.
- Visit your potential investment during both daytime and evening hours to be sure it’s not occupied.
- Recent news reports indicate that evicted homeowners are returning to their homes as they await the federal and state investigations into the foreclosure processing allegations.
- Criminals, transients and local youths sometimes set up shop or have parties in long-empty homes.
- Have your finances in order and be ready to pay.