You might have developed a passion for renovating and flipping a fixer-upper, or the foreclosed home you are considering is the home you have always dreamed of living in. The price might also be a dream come true, as foreclosed properties are often sold at a fraction of what you would usually pay. However, before you put down an offer on that bank-owned home you are considering, you need to understand the unique issues you can encounter when buying a foreclosed home in Massachusetts.
Foreclosed homes often sit vacant for months or years before new owners purchase them, driving down the property values of nearby homes and generally becoming an eyesore. While the neighbors might thank you for taking ownership and fixing up the property, if you have little experience in this type of purchase, you might find that you ended up with more hassles than you bargained for.
For example, abandoned homes are often vandalized, either by random strangers or the previous owners. Former owners might be bitter and try to get back at the bank by making off with fixtures and appliances that should have come with the sale, such as countertops, cabinets and even the dishwasher. The yard and interior may need some major work, and it is also possible that insects and vermin have taken up residence.
You should also be aware of the following points that are normal for the sale of a foreclosed home:
- You will most likely need to be preapproved for a loan before the seller will agree to your offer.
- Foreclosed homes are sold as-is. You are responsible for repairs and will have little chance of getting a repair discount.
- It is a good idea to check the title for outstanding liens on the property, which are sometimes overlooked by the banks that have taken up ownership.
On the flip side, there are numerous benefits to buying a foreclosed home, the most notable being the reduced cost. Many experienced home flippers use the money they saved to make repairs and fix up the property. The key is in knowing what you are getting into before you make the commitment, and in seeking advice from those with experience in real estate issues.