As seen in most recent “Home Schooled,” there has been a drastic increase in the purchase of foreclosed homes since the recent recession. As such, there are certain tips a prospective buyer should know when buying a foreclosure property since the process is different than a typical transaction.
First, a home in foreclosure is owned by a bank. Specifically, a home is foreclosed upon when the homeowner is unable to pay back the mortgage they have on the property. When the mortgage is unable to be paid, the bank “forecloses” on the property. Simply put, the bank takes back possession from the homeowner.
Consequently, when buying a foreclosure property, the seller of the property is the bank. As you can expect, banks do not have the same type of interest in selling the property as a typical homeowner. Therefore, it is imperative a prospective homebuyer stays on top of the bank during the purchase of a foreclosure property and, most importantly, during the home inspection process.
Staying on top of the bank consists of several different things as it pertains to the home inspection process. Most notably, however, make sure the bank has turned on the water and gas when the inspection is to be conducted. Frequently, the water and gas are not turned on during the inspection of a foreclosure property for the simple fact that no one is actually living in the property. As a result, a comprehensive inspection is unable to be conducted and, in turn, a prospective buyer is unable to clearly determine the issues need to be rectified. For example, without these items being turned on, an inspector is unable to determine whether a water heater, stove, furnace, or washer are operating properly. Moreover, the failure to have these items turned often delays the home inspection.
Staying on top of the bank during the purchase of a home and, more specifically, during the inspection process will save a buyer a vast amount of time and, potentially, considerable expense. Quite simply, by failing to stay on top of the bank, a buyer might be unable to identify all the repairs needed and, as a result, be forced to pay for the same down the road.
Next week the topic of radon mitigation will be discussed so please be sure to tune in to the next Tip at Ten in the next version of “Home Schooled.” Also, please continue to check this blog periodically for vital information about the home inspection process.