Foreclosures: Inspect Before You Buy
It's no surprise that buyers are looking for a bargain - but now, even more people are showing interest in the growing foreclosure market. According to Trulia.com and RealtyTrac, a recent survey shows that 55 percent of U.S. adults are at least somewhat likely to consider a foreclosed home when buying real estate. That's nearly a 10 percent increase from November 2008.
However, many buyers are a bit leery of foreclosures. Approximately 85 percent said they can't identify negative aspects of the properties. Among the top concerns are hidden costs, a risky process, and further de-valuing of the foreclosed property.
Buying a foreclosure doesn't have to be a scary and unknown process if you take the right precautions. Inspect before you buy is a good motto for any real estate transaction, but even more so with a home that has been foreclosed and possibly sitting vacant for long periods of time.
"A lot of the foreclosures that I have inspected have had fires, usually due to the heating equipment. And it's predominantly because somebody just wasn't taking care of the equipment - not because they were trying to set the house on fire because they were upset. It's just poor maintenance," says Frank Schulte-Ladbeck, a home inspector based in Houston.
He says the trouble with foreclosures is what happens to the homes during the foreclosure process. "People who are getting into the point where they're going toward foreclosure usually don't have money for maintenance," says Schulte-Ladbeck. Consequently, sometimes important housing needs are let go - or potentially worse, the former homeowners unsuccessfully attempt to do their own repairs.
"You see weird plumbing or wiring setups that can sometimes really cause a problem down the road, like with the electrical [system] causing fires or the plumbing causing leaks," says Schulte-Ladbeck.
Another big concern is when the previous homeowners used various items in the home as replacement for something that had broken. Schulte-Ladbeck says because homeowners who are facing foreclosure frequently cannot afford to fix something in the home, they go without it. But that can cause more problems.
The best thing you can do if you're considering a foreclosure is to have it inspected. Just make sure that the property is ready to be inspected or you could be doing yourself a huge disservice.
"Have everything turned on, because that's when you might start seeing things that are wrong like leaks and electrical problems. You could see problems with the heater or the water heater, ovens or cook tops that use natural gas," says Schulte-Ladbeck.
Seeing is believing and, with inspections, the only way to know for sure is to have everything operating so you can gain the most knowledge about needed repairs.
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