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An active housing market has reduced the number of foreclosed homes in inventory, but there will always be foreclosed homes available to purchase. Many buyers are not aware of what to expect when purchasing a foreclosure. Here are some home truths about buying a distressed home.
Many buyers believe foreclosed homes sell at rock-bottom prices. They expect massive and unrealistic discounts. While the bank may be willing to sell for well below the fair market value, their goal is to recover the loss they incurred when providing the original mortgage. Additionally, foreclosed properties may have long-standing maintenance issues that require a substantial investment to remedy.
A foreclosure removes the primary mortgage debt, but a distressed property may have other claims for money owed in back taxes, for mechanical work and contractors’ fees. A complete title search should tell you if there are liens that need satisfaction when you purchase a property. Your real estate agent can guide you in how to discover unsatisfied liens or judgments against the property
Most owners do not simply move out of the property when they can no longer afford to make payments. When an original owner loses income, maintenance often becomes a low priority. And, if they have a medical disaster, a decline in health often means a decline in care for the property. Storm damage, pests, and other hidden issues mean damage to a home that gets overlooked when the owner has different priorities.
Although there are some stories of angry owners vandalizing the foreclosed property that they invested their life savings into, more often are issues with opportunistic thieves. They remove plumbing and light fixtures, paver stones, and other readily accessible objects from an abandoned property.
Schedule a thorough inspection before you purchase if possible so that you know what you're getting. Your real estate professional specializing in distressed properties can connect you with an unbiased inspector. They will report on your potential new home and help you uncover any hidden costs lurking there.
Lenore has been a Collier County resident for over 40 years. She fell in love with Naples and surrounding areas and decided to make the move from Cleveland in December 1981. Lenore has a Bachelor of Arts Degree from the University of South Florida where she met her husband of over 25 years. They have two children that attend University of Florida and Florida Gulf Coast University. She has worked as a Community Service Deputy with the Collier County Sheriff’s Office, a Guest Teacher with the Collier County Public Schools, and continues to serve on many committees with the Parent-Teacher Organizations in Naples. Lenore has a true passion for Naples and is excited to put that passion to work for her customers. Whether you need an expert guide in buying a home, or a dedicated leader to sell your property; her love of Naples will always give you piece of mind in your real estate venture.