By Elizabeth Weintraub, About.com Guide
Price-conscious home
buyers are lured by the low prices advertised for properties in foreclosure.
They hope to show up at the auction and win the lowest bid. However, many of
these homes are not available for inspection prior to purchase. Is it smart to
buy a home that you cannot inspect? Could be if the price was low enough to
compensate you for the amount of work that might be required to bring the
condition of the home to market standards.
Before you rush forward
to buy a foreclosure, stop to think about some of the drawbacks and
repercussions if you can't get in the house to inspect the interior.
Who Is Living at the
Property?
If the property is
occupied, the successful bidder is typically responsible for removing the
occupants, who may not be the previous owners. They could be relatives or
friends of the owners, renters or squatters. You might have to evict them.
·
If you are unfamiliar with eviction processes, you should hire a lawyer to
handle it for you.
·
Be aware that tenants who are sued for eviction sometimes retaliate.
·
A better solution might be to pay or bribe the occupants to leave.
Non-Owner Occupied Homes
One such home in Yolo
County, California, was rented to a dubious couple: a former convict recently
released on parole and his partner with sketchy credit, who flinched at loud
noises like a domestic abuse victim.
The seller, unaware that
his deed of trust contained an "assignment of rents" -- meaning the
lender had a right to collect the rent if the owner did not make his payments
-- stopped paying on his piggyback loans and didn't much care who he rented to
as long as they paid him. Fully intending to pocket the rents and forget about
his mortgage loans, the seller listed the rental for sale. His agent made an
initial attempt to gain access to the home. The ex-con, a neo-Nazi with a
shaved head, massive tattoos and holding back a barking pit bull, peeked
through the door and then slammed it in the agent's face.
Soon as the For Sale
sign was planted in the lawn, the tenants stopped paying rent. Neither the
lender nor the seller could collect any money from the tenants. The agent could
not show the property. This was an ugly situation. The lender (who held both
the first and the second loan) filed for foreclosure and vowed to file a
deficiency judgment against the seller, which junior lenders can do in
California if the loans were not purchase money.
Condition of Foreclosed
Homes
Because these homes are
purchased "as is" from the lender or HUD, there is no guarantee of
condition. Sometimes it is possible to inspect these homes prior to making an
offer but sometimes, as in the above example of the home in California, access
is not granted.
When sellers realize
they are about to lose their homes through foreclosure, it's not uncommon for
them to stop caring about the home.
·
If something breaks or malfunctions, they aren't going to fix it.
·
If they are angry or desperate enough, it's possible they might actually
destroy the house. An effective way to flood the home is to turn on all the
water faucets, plug the drains and leave. Others smash out walls, then pull out
the copper pipes and wiring to sell as scrap metal.
Owners will also sell the appliances and kitchen cabinets. Some horrible-excuse-for-human beings even leave animals behind, locked inside without food or water.
Buying foreclosures is
not for the faint of heart. It's best handled by the pros and is not
recommended for first-time home buyers. I don't care what seminar you attended
-- if it's not giving you this information, it's not preparing you for reality.
My name is Scott Grebner and I have been helping my clients
realize their own personal real estate dreams. Real estate is a
relationship-based business that works best when client relationships are built
on trust and confidence. My goal is having clients be completely satisfied with
the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate
market functions in this country today. Gerharter Realtors is embracing these
new mediums of communication to better serve our customers. We have created our
e-family to better place important information in your hands to help you
with your housing needs. As a part of Gerharter Enterprises we have
access to a broader range of additional services and resources to better assist
you. Visit me
at my Web Site, Blog, Facebook, Twitter, You
Tube or Pinterest. Please check out
our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past
generations was to pay off a mortgage. The dream of today's young families is
to get one. I would love to hear from you, about your Real Estate Dreams and
questions.
Email me at scott@gerharterrealtors.com.
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