Foreclosed properties have always been a draw for some homebuyers, especially house flippers and other investors looking for deals on homes they can turn into profit by either renovating and reselling or converting into rentals. But with affordability being so challenging in today's market, some prospective buyers who are just looking for a place to live are turning to foreclosed properties as an alternative.
For anyone considering taking this route, there are a few things you need to be aware of. Brett Johnson, owner of New Era Home Buyers in Denver, says what surprises many first-time buyers is what they can't do before making an offer: things like getting a home inspection, negotiating concessions or even touring the inside of the home.
"Realistically, the only thing you will see is the outside of the home if you drive by it," Johnson says. "The buyers who do best are usually the ones who assume something unexpected is waiting for them."
Exactly what "unexpected" means can be anything from a scruffy interior to rotting floors and mold. You may even have to deal with personal effects the former owners left behind. Johnson has found furniture, family photos and even abandoned cars on properties he's purchased — items that can cost time and money to remove.
And then there are the more unusual finds. Steve Jolly, real estate broker at Benchmark Realty in Nashville, Tennessee, once entered a property only to find an abandoned pit bull who seemed aggressive. This story ends well, though. After failing to secure help from the police, Jolly started knocking on doors until he discovered the dog's name: Buck. After several cans of dog food and another tour of the neighborhood, Buck found a new home. (Kudos, Steve, for going above and beyond for Buck!)
Or you could encounter the same fate as a buyer who purchased a property sight unseen at an auction in Connecticut. As reported in The Wall Street Journal, Edward Marchion walked into the home he purchased only to find three corpses — the skeletal remains of the former owner, her son and an as-yet-unidentified person. Not the happiest of finds, for sure.
The probability of finding dead people in a home you just bought is probably low (I haven't found any official stats on this), so the instance noted above shouldn't put anyone off foreclosure auctions. You can often find diamonds in the rough, but you also need to be prepared for the unthinkable.
