What to consider before you buy a foreclosed home

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In today’s market, many home buyers and investors are attracted by the increasing number of foreclosed homes that are constantly becoming available in the Atlanta market. Although foreclosed homes often present a great opportunity, there are also risks to be aware of. Buyers should realize that foreclosed homes are not always great deals, and often times, they come accompanied by a set of serious financial or structural problems that if not detected could make for a very poor investment.

There are many things that buyers need to consider before they decide to make an offer on a foreclosed home. While this article is about single-family homes, it is worth pointing out that many buyers are completely unaware that condominium foreclosures come with an additional set of concerns and require even more due-diligence than single family home foreclosure property.

One of the first issues to consider is the condition of the properties title. For example, you want to know if additional liens such as second mortgages and tax liens may still be attached to the property and passed on to a new buyer.

Buyers should also be aware that most foreclosures are sold “AS IS.” Some foreclosure properties are open to inspections, but others are not. Since foreclosed homes often remained abandoned for long periods of times before they get sold, some may be victims of pest infestation, mold growth, and vandalism.

Another thing to consider is that a property disclosure statement is often not available because the seller is a bank and they have no knowledge of the property – this in another reason why having an inspection expert is critical. It is important to check everything from plumbing, electric wiring, foundation, etc.

There are other issues to consider, but suffice it to say, a lot of research needs to be done before making an offer on a foreclosed home.

It pays to find the best real estate expert you can find, and one with experience dealing with foreclosures and negotiating with banks and asset managers when considering buying foreclosures and bank REO properties.

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