What Banks Should Tell You About Foreclosed Properties

With so many available homes on the market, many first time buyers are considering purchasing a foreclosed home over a home being sold by an owner.  This is primarily due to the fact that foreclosed homes can often be purchased for much less than other homes listed in the same area.  But, as with any good deal there are precautions that buyers should take before making an offer on a foreclosed home.  What we are going to do is offer you some information on what banks should tell prospective buyers about foreclosed home they may own.

Some banks have come to the realization that unless they start making repairs on the properties they own, they may be stuck with them for some time.  While this may be the case for some banks, the majority of foreclosed homes are sold as is.  When a foreclosed home is sold “as is” by the bank, the bank is under no legal obligation to disclose any problems with the property.  In many cases, the bank is often unaware of any pre-existing problems and doesn’t perform any inspections on the property prior to selling.  Banks are under no legal obligation to make any repairs to homes being sold “as is” and they tend to offer buyers a limited amount of time to perform any inspections. 

It is because of this that anyone who is considering purchasing a foreclosed home takes the time to have a thorough inspection performed on the property.  This can help you discover any problems that the previous owner may have let go over time and you will also find out the true condition of the property before making an offer to the bank.  Many vacant homes that are owned by the bank have been sitting for months without anyone caring for them.  This leaves the home susceptible to any problems that may occur from the weather.  Without someone there to shovel snow and put the gutter drains down, unwanted water may find its way into a crack and start seeping into the basement and can even cause issues with the foundation.

In addition to the maintenance problems, you can also run into problems trying to get the power to house restored in order to perform a thorough inspection.  Many electric companies often remove the electric meter from a house once the service has been terminated.  If this is the case with a property you are interested in, you will need to have a meter reinstalled and depending on the location of the home, you may also be required to pay permit fees and have a county inspector inspect the meter post.  These are just a few of the most common problems associated with purchasing a home owned by the bank.  If you are considering purchasing a foreclosed home, properly educate yourself before submitting an offer to the bank.

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