The housing market may be on the rebound — in February, the number of properties that received a foreclosure filing in the U.S. was 25% lower than the same time last year, according to realtytrac.com — but there are still tempting foreclosures available. While there might be great deals to be had, there are also some pretty scary things to watch out for.
1. No disclosures. The banks can do things their way, and, to them, a home is just an asset. You will rarely have access to the previous owners, so don’t count on getting any building history.
2. Houses are sold as-is. Often the previous owner will have taken everything of value, including appliances and fixtures, if they’ve run out of money. Replacing these things will be expensive, so factor the cost of anything that may be missing into the price of the home.
3. No credits. If there’s anything that needs to be fixed, the bank will likely not give you credits for repairs. Again, a significant cost to you.
While foreclosures offer the possibility of a fantastic deal on a home that you may not otherwise be able to afford, know that there are risks involved. If the house is being sold at auction, you won’t have time for a full inspection, and will assume all responsibility and cost of any possible damage, repair or restoration. There could be smoke damage, mold or contamination that could cost you more than the house itself.
If you’re considering the purchase of a foreclosure, a Housefax Report will help you avoid the major pitfalls of buying a house from a bank. The Housefax history will provide a set of clues that will improve your search from “buyer beware” to a much safer “buyer aware” experience.