How to Approach Buying a Foreclosed Home

by Pablo Torres 11/15/2020

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

    Pablo Torres

    Pablo Torres is a qualified Real Estate Agent with over 10 years experience in real estate sales, due diligence and contract negotiations. Knowledgeable of South Florida neighborhoods. Currently, Pablo focuses his skills on all markets in the Miami metropolitan area.

    He has the ability to understand sellers, buyers and renters needs with excellent communication. Fluent in English and Spanish with working knowledge of Portuguese. Pablo has impeccable reputation and a passion for real estate.

    He graduated with a degree in International Business from Florida International University (1998) and a masters in business administration from Nova Southeastern University (2003). He had embarked on a career in commercial banking before being driven to switch to one of his passions-real estate.

    Dedication, perseverance and punctuality allowed Pablo to sell different types of properties. His expertise with South Florida's cultural diversity has allowed him to sell real estate to both buyers and sellers.

    Part of what makes Pablo so successful is his dedication to exceptional customer service and his devotion to their needs, whether they are buying or selling properties. Pablo has many repeat customers who cite his willingness to work long hours to resolve the toughest issues, as a reason why they stick with him. Torres integrity, attention to detail and careful handling of a transaction, exceeds their expectations. Sellers know that Pablo's extensive and personalized marketing strategies, means that their listing is seen by most buyers.

    As a real estate professional, Pablo has the tools to represent your interests in virtually any transaction. Pablo's ability to interview, reason and figure out the smallest details makes every successful transaction a seamless process. Pablo is the right real estate professional to hire.