Have you wondered if you can really buy a foreclosure and either make it your primary home or as an investment property to lease or to flip. Of course the simple answer is yes you obviously can do so, however there are a lot of unknowns that you should familiarize yourself
Buying and Investing in these types of properties requires even more due diligence due to the additional problems associated with them. Once a property is foreclosed upon and is resold by the bank it will be sold in an “As Is” basis. Meaning that unless some type of inspection is made the buyer really doesn’t know the conditions of the property.
Secondly, you must understand that many liens and debts on a foreclosed property are not extinguished because of the foreclosure but are in fact still enforceable. The most common ones that you may not be aware of are:
- Association Dues.
This could be from a Condo Association or a Homeowner’s Association
- Have the property taxes been paid up to date, because a foreclosure does not wipe out the past due taxes
- Are there are any open permits or code enforcement liens on the property. Many foreclosed properties have had unlicensed contractors and or prior owner remodels done that were not permited.These issues require additional repairs being made prior to occupancy or reselling the property.
In addition, a complete title search will need to be completed so that any hidden title issues can be found and resolved. In some instances; the buyer may have to purchase with these title issues, but at least you will know the risks associated with the property.
If you are considering purchasing these types of properties, I would recommend hiring an experienced real estate associate to help you traverse the many obstacles in buying a foreclosed property.
If you have any questions feel free to contact us and one of our associates will be happy to help you.
Rene Sabatini
Azure Realty Services, Inc
954.946.3838
