Make sure you’re getting a clear title. This hasn’t necessarily been taken care of in a foreclosure. Together with your real estate agent, you should thoroughly study the title documentation to make sure there are no easement issues and all liens have been released. If you have any questions at all, talk to the person who did the title research to make sure you’re not going to have unpleasant surprises down the road.The main advantage to buying a distressed property is price. Traditionally, buyers have been able to get good deals, especially on bank-owned properties. And this can still be the case, though lenders have become less willing to accept extremely low offers. But sometimes a low price can come with hidden costs – in the form of repairs and maintenance that may have been delayed.
You may be getting a better price, but what if you have to replace the sprinkler system or perform major repairs?That leads to the necessity of having the property inspected. A foreclosure may have been vacant for many months, and may have gone through a winter with the utilities turned off. Broken pipes, a leaky roof and other potentially costly problems are a real possibility.
You may need more than one inspection: a regular property inspection and one by an engineer. Make sure the utilities are turned on during the inspection. You need to be incredibly well-informed as to the property’s condition, because 99 percent of the time the banks sell the property as-is. And they’re very serious about that.
