Abandoned properties are potential low-cost purchases that may be attractive to prospective homebuyers.
An abandoned property is usually a property whose original owner is no longer in possession of the home, and due to financial difficulties the house is run down and in need of repair. However, some abandoned properties turn out to be in good condition, with an owner who wants to unload it before foreclosure. This could provide the right buyer with an opportunity to purchase the property at a considerable discount.
Purchasing an abandoned property follows the same procedures as buying any other piece of real estate. Before setting out on your journey to find an abandoned home, review your financial situation. Remember, there will be additional expenses over and above the original sale price.
A prequalification from your bank or lender will help you estimate what mortgage amount you qualify for. Many banks also require pre-approval letters so you can make quick decisions on the property you wish to purchase.
Finding Abandoned Properties
Most abandoned homes are on their way to foreclosure, but the bank has not yet initiated the process. Various lists of abandoned properties are available. Check the classifieds for homes whose listings contain certain phrases that may indicate an abandoned property, such as “immediate possession,” “must sell,” “below market value” or “under appraisal.” REALTORS® have valuable knowledge of abandoned properties in the area and can provide you with selections of homes about to be foreclosed on by the bank.
Some properties may look abandoned, but are not listed for sale. If you find an interesting property like this, visit your county clerk’s office. There, you can find information about the homeowners, the home’s current appraised value, liens or tax problems. You could then try tracking down the owners and asking them to sell their property. If the property has had liens or tax problems, the owners might be more willing to sell.
Placing a Bid
Assuming you have found a potential home and been pre-approved, you will want to figure in the costs needed to get the home in good condition.
Get a thorough maintenance inspection performed and note what needs to be fixed and how much it will cost. Add in the cost of the appraisal fee, pest and lead inspection fees, title insurance, closing costs and any legal fees that might be involved. Crunch the numbers before you consider a bid. A REALTOR® can also accompany you to the house and point out the extra expenses you will incur after the purchase. A REALTOR® can also help you figure out how large your bid should be.
Look for the right opportunities and you will find the home that is just right for your budget.