Make your Foreclosure Home Purchase a Dream and not a Nightmare
Now is great time to buy real estate.Â Whether it is a purchase as your primary residence, rental property or a second/vaction home, prices are are at an artifcially low level in much of the country.Â That doesn't mean that all, or nearly all properties are good investments though.Â There are many factors to consider when evaluating any real estate purchase and it is no different when it comes to foreclosed houses.Â Below are 10 areas to look at closely when considering a foreclosed property.
- Â Location - You know the old real estate saying. There are only three things that are important when choosing real estate. Location, Location and Location. This saying is every bit as true when purchasing a foreclosure.Â You will want to be familiar enough with the location of the property to know what type of neighborhood it is and how desireable of a place to live it is.Â One way is to talk to people who live in the neighborhood to get their opinion. Also, you could talk to people in surrounding neighborhoods to get their view on your prospective area.Â Another way is to have a realtor look up comparable properties in the neighborhood to find out how fast properties are selling and for how much.
- Potential Curb Appeal - Since most foreclosures haven't been lived in for months, there may not currrently be much in the way of curb appeal. This is where some visualization comes into play.Â If this proves to be difficult, you may be able to find a nice looking home of theÂ same model in the neighborhood.Â This will make it easier visualize what your potential house could look like.
Now on to specifics.Â With most foreclosures, the buyer is repsponsible for discovering anything that is not obvious about the condition of the property.
- Â Roof - A roof which is a few years old or less is pretty easy to spot. After that, without a roof inspection, it is lot harder to determine the condition of a roof. Wood shake roofs are a cause for concern because it is difficult to determine how old the roof is and/or what condition the roof is in.Â They are also much more expensive to replace. Check for water damage on the inside ceilings as an indication of a leaky roof.
- Fences - Fence patching is not a big expense but the cost of extensive fence replacing can add up quickly.
- Windows - Dual panes or single panes.Â Dual pane windows for even a smallish house will usually cost over $4,000.Â Easily over $10,000 for larger houses.
- Â Kitchen - Cabinets and countertops. Are they modern? Good condition? Check for water damage underneath the sink. Generally with a foreclosure you can count on most of the kitchen appliances having been already removed or stolen from the property.
- Â Bathrooms - Check for water damage and/or mold underneath the sink and around the tub/shower and toilet. Some mold damage can be cleaned up without much expensive but extensive damage can be costly.
- Flooring - Measure square footage of rooms where floorcovering will need to be replaced. Cost will great vary depending on the square footage and quality of floor covering.
- AC Unit/Furnace - Very important.Â Many foreclosed properties have had the HVAC unit stolen or the copper wire stolen from the unit.Â Check and test thoroughly and make sure that even in an "As-Is sales contract",Â you state specificallyÂ that the HVAC unit must be in working order at time of closing.Â Â This willÂ cover you Â in case there is theft or damage during the escrow period.
- Drainage IssuesÂ - This can be difficult to spot in warm weather months.Â Look for obvious signs of damage or slopes in the yard or concrete that don't look right.Â Also, the neighbors on both sides may be able to help you with information.
- Other things that may not be as costly to fix, but will add up if there are too many are: major cracks in concrete driveways and patios, interior walls and interior doors, exterior doors, trash and debris removal from front and backyards,Â trees which may need to be removed, fences, chimney and fireplaces.
Currently there is no shortage of available foreclosed properties and no shortage of "good deals" on foreclosed properties." Take your time and be thorough when considering a property.Â Your patience will make it much more likely you will get a property which you will consider a "good deal" for years to come.