Cost Considerations for Foreclosed Property

by Rose Wolkins 07/18/2021

Image by Steve Heap from Shutterstock

An active housing market has reduced the number of foreclosed homes in inventory, but there will always be foreclosed homes available to purchase. Many buyers are not aware of what to expect when purchasing a foreclosure. Here are some home truths about buying a distressed home.

You’re not always getting a deal.

Many buyers believe foreclosed homes sell at rock-bottom prices. They expect massive and unrealistic discounts. While the bank may be willing to sell for well below the fair market value, their goal is to recover the loss they incurred when providing the original mortgage. Additionally, foreclosed properties may have long-standing maintenance issues that require a substantial investment to remedy.

The bank may not have the only lien.

A foreclosure removes the primary mortgage debt, but a distressed property may have other claims for money owed in back taxes, for mechanical work and contractors’ fees. A complete title search should tell you if there are liens that need satisfaction when you purchase a property. Your real estate agent can guide you in how to discover unsatisfied liens or judgments against the property

You may find maintenance problems.

Most owners do not simply move out of the property when they can no longer afford to make payments. When an original owner loses income, maintenance often becomes a low priority. And, if they have a medical disaster, a decline in health often means a decline in care for the property. Storm damage, pests, and other hidden issues mean damage to a home that gets overlooked when the owner has different priorities.

You may find vandal activity.

Although there are some stories of angry owners vandalizing the foreclosed property that they invested their life savings into, more often are issues with opportunistic thieves. They remove plumbing and light fixtures, paver stones, and other readily accessible objects from an abandoned property.

Schedule a thorough inspection before you purchase if possible so that you know what you're getting. Your real estate professional specializing in distressed properties can connect you with an unbiased inspector. They will report on your potential new home and help you uncover any hidden costs lurking there.

About the Author
Author

Rose Wolkins

REALTOR® Rose Wolkins has been building a long list of satisfied San Diego home buyers and sellers since she began her real estate career in 1988.

Her motto “Building lifelong relationships one home at a time” exemplifies both her attitude and the care and commitment with which she serves each client. It all begins with communication – in listening well, being readily available to answer questions, and keeping clients fully informed throughout their transactions. She’s also known for staying one step ahead of things, so she can keep transactions on track and address issues before they become problems.

Always striving to do the best for her clients, Rose stays current with changes in laws and technology through taking numerous classes throughout the year. She also stays current with the ever-changing San Diego housing market.

While she thoroughly enjoys using her advertising, photography, staging, marketing, and negotiating skills to successfully sell her listings, her favorite part of the business is handing overjoyed buyers the keys to their new home. She loves sharing the joy.

In addition to supporting her clients, Rose supports the real estate industry and was voted chairperson for the North County Real Estate District Coordinating Committee several years in a row. Voted a 5 Star Top Real Estate Agent for the past several years and now again in 2020, she’s also a member of the Women’s Council of Realtors.

In her free time, Rose enjoys reading, gardening, exercising, using her considerable photography skills, and spending quality time with friends and family. When you’re looking for a San Diego agent who knows the territory well and who will dedicate herself to turning your real estate goals in to reality, take this advice from her past clients: “Call Rose Wolkins.”