John Bendall owner of Re/Max Classic Group offers some advice on buying a foreclosure property.

As the news reminds us on a regular basis these days homeowners are being foreclosed on at record rates.   In turn that means that there are more bank owned properties available for purchase.  One persons great misfortune may offer another person a great opportunity.

There are several things you need to know before purchasing a foreclosed home.  The first thing you will need to know is how much money it will take to fix up the home in order to sell it for a profit, or to make it suitable for inhabitation.  Homes that have been foreclosed on usually have not been maintained well.  If owners didn’t have enough money to make payments it is not likely that they had enough money for improvements or even general maintenance.  Sometimes homes remain empty for extended periods of time while bureaucratic red tape, like making sure the title is clear, is dealt with by the bank.   If the previous occupants packed up and took off sometime ago there can be further neglect to contend with.

The next thing you need to know is where to find foreclosure properties.  While many foreclosure homes are listed by realtors they may not be marketed traditionally in the same way as an owner occupied home.  However they are usually listing in the Multiple Listing System so a professional Real Estate Agent should be able to find any bank owned homes in the area you are looking in.  There are also services that for a fee will provide access to bank owned properties across the country. 

Lastly, if you are going to purchase a foreclosed property make sure you have plenty of extra time.  You will want to get a thorough home inspection to make sure you are aware of any damage and maintenance issues. You will also want to have a title search done and to invest in title insurance to make sure you are not responsible for any old liens on the property.  Negotiating the purchase can take a little longer when dealing with a bank as opposed to an emotionally invested owner. 

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