|
| More rates and news from Dont Just Jump Into A Foreclosure Property(Do you want or need a house but don’t have a lot of money? One option is to buy a foreclosed house.)
I’m sure one of your friends or relatives got you interested in the idea by saying that someone they knew bought a huge three bedroom, two bath, two-story foreclosure home in the suburbs at an unbelievable price. While this could very well be true, there are a lot of pitfalls and headaches that can be associated with foreclosure property.
The article, “Things You Should Know Before Bidding At Public Foreclosure Auctions,” written by Albert Lee and posted on ezinearticles.com, provides a few of the possible negatives that could be associated with a foreclosure purchase.
While it is very possible for you to obtain your dream home from a fraction of the market value price, consider why these properties are foreclosures to begin with.
“These are real estate properties that have been abandoned by previous owners, or seized and forfeited possessions by the government and government agencies or banks and other lending institutions.”
Your best case scenario is that the property you are looking to move in to once belong to a good person or family that, for one reason or another, lost the ability to make their monthly payments and eventually had to be evicted. Once evicted, they moved on to a different situation and you never hear from them again.
That is ideal but it is not uncommon for the previous tenants to not be as courteous.
“You may just find yourself a brand new owner of a foreclosed property with tenants still in it. In this case, you will need to consult a lawyer and eviction processes may take a long time. This will surely be an obstacle for you in getting a return on your investment.”
Even worse than forcing your new roommates out of the property is the possibility of them forcing you to sell it back to them during a pre-determined time period.
“This has been known to happen. In this case, don't get cozy with your new property just yet because it may be bought back from you and you will have no choice, under the law, but to sell it back. Do not worry though, because if this does happen, the law also states that you must be paid in full with suitable interest.”
You may not be able to own another property for quite some time but at least you learned from your experience and earned a little profit while doing it.
Perhaps the biggest worry about buying a foreclosure property is that you usually are not allowed the opportunity to inspect or hire someone to inspect it prior to bidding and paying for it.
You may have already bought the house and realize upon opening the door that you need to spend an addition $10,000 to $20,000 just to get it into a livable condition.
Other than electrical or structural problems, there may be other damages created by the former tenant out of rage upon being evicted.
“The limitation of these public foreclosure auctions is that there is an ‘as is’ policy that is enforced, meaning that if you have purchased a home or building that is close to collapse, they will not be responsible for it.”
If you have a limited budget, you should consider trying to save more money before buying a foreclosed house.
You wouldn’t buy a used car without seeing it first, so it may not be in your best interest to do so with a house, which will be the largest and most important purchase you ever make.
|
