If you are a consumer considering looking at reposessed homes for purchase, there are more than a few things to keep in mind.
First of all, when going to see the properties, remember, most of these house are without heat, running water, and electric. So, dress warm in the winter months, bring a good flashlight, and don't plan on using the rest room there. More banks are realizing leaving the power on makes it easier to sell, so we are starting to see more with electric on. Also, these places, many times are not a safe place for your kids! Broken glass, exposed wires, mold, and other hazards can be an issue.
Not all of these homes qualify for FHA or conventional loans. Missing or broken doors, windows, and bath fixtures, can be a red flag to your lender. The appraiser will note these on the report.
We are starting to see more flexibility with the sellers of these properties, as they offer closing cost assistance, the occasional repair, and allowing the offers to be contingent on inspections.
Your lender may require the utilities to be on for inspection at your cost. Ask lots of questions of your lender and your agent.
Ask if there are any bank owned addendums you will need to sign in order to have a contract on the property. Most do have these, and read them completely! Any verbage in the documents trumps what is outlined in your standard purchase agreement. There sometimes are late closing penelties, non refundable earnest deposits, and hidden costs normally paid by the seller.
After a home sits vacant for a while, drain pipes can fill with roots, and fail once you start using them on a regular basis again. It's a very common occurance. Moisture also collects in the vacant home, in places sometimes unseen, therefore causing mold to go unnoticed.
Have the home inspected by a professional! If it has a well and septic, by all means have them tested too.
You will need to rekey the house / garage completely once you close!
There are many good buys on foreclosed homes right now, and the owners are becomming more buyer friendly. Contact a local buyers agent with plenty of foreclosure sales behind them to guide you through this process.
With a little caution you may be able to get a great deal and feel that way even years later!
Paul Dumke
ABR E-Pro Realtor Southwest Michigan
269-921-1125 cell
www.BerrienCountyProperties.com