With all that we read in the media and hear from those “in the know”, a foreclosed home seems to be the best bargain in town. But upon closer inspection, and a closer inspection is mandatory, these foreclosed homes can often be filled with money traps. That is why a good agent will recommend all due diligence to a buyer looking to buy a home. The reasons for a home’s poor condition may not be as obvious as you might think. There are horror stories about the former owners tearing off fixtures, or letting meat spoil. These certainly are conditions worth worrying about, but they are obvious. The less obvious conditions are lack of home maintenance. Once the homeowner realizes they are fighting a loosing battle, they stop fighting and just let the home decay. One of the most common issues I see in a foreclosed home is the roof, and in particular, the rain gutters. Where a homeowner would probably clear the gutters to prevent water backing up, someone who doesn’t care about the future of the home will let the gutters back up, causing damage to the corners of the roof and exterior walls.
As someone who specializes in R.E.O’s (Real Estate Owned or Bank Owned) properties, one of the first things I recommend is to make sure the buyer has all the inspections done. Other issues such as leaking plumbing, outdated electrical, or poor construction methods, can all be mitigated by thorough inspections. Many banks only allow a short time to have the inspections completed, so it is very critical to schedule them immediately.
Foreclosures can be a great bargain, but unless there is proper and thorough due diligence, they can also become a bust.
