Yes! There is no better time to buy a foreclosure in American than now! But just like any purchase for any product or service you must be prepared. Below are some great tips to help you with your foreclosure purchase.
- Always get a home inspection! Every foreclosure shows differently. Some need a full rehab and others may visually be move in ready. But an inspection goes beyond visual, it tests systems. Remember, in Maryland banks are exempted from disclosure by law. A buyers only way to understand what is going on with the foreclosure is by a home inspections. It would advisable to consider other inspections also like termite, radon, mold, chimney (if applicable), well and septic (if applicable).
- All Foreclosures are As-Is. Generally speaking there is no exception to this rule, unless the bank has disclosed some up front repair they have completed or will complete. Buyers keep in mind the inspections will be for informational purposes only. Don't be cheap! Get 'em! This will help prevent you from investing in a money pit unknowingly. Also, be prepared to pay for the electric to be on and pay to dewinterize the foreclosure. This could be negotiated during offer but, if they bank won't pay for it, be prepared to.
- There could be lender required repairs, be prepared to do them yourself at your expense. If you are purchasing a foreclosure using financing your lender WILL have an appraisal done. Generally, the appraiser is analyzing the property to establish value. However, if the appraiser sees there are visual safety concerns/repairs they will be noted on the appraisal AND MUST be fixed or the financing stops and the deal falls through. Just a few examples of a lender required repair are:
- Hanging wires
- 3 or more risers with no hand rail
- Mold
- Peeling paint
- Termite damage
- Buy a home warranty. This is a great way to help provide additional protection. When a buyer closes on a home, at settlement, you've accepted the property. That's it. No going back, undoing it, recourse or anything. A home warranty will help with repairs that WILL HAPPENED after and during your time of home ownership. There are many home warranty policies available to purchase. Please shop and pick the best one for your home needs. A few popular home warranties are HMS, Olde Republic and AHS. They usually last for a year and are renewable. Best investment a buyer can make on a foreclosure home, short sale home or traditional purchase home.
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