Dear Mr. Grump,
My husband and I are first-time buyers and have our eye on a very cute home. The catch is that it was foreclosed and has been unoccupied for some time. What are the risks involved? Do you think we should do it, or would it be throwing good money after bad?
Willing to Put in Some Elbow Grease
Dear Greasy Elbow,
There’s a reason that scooping up foreclosures is all the rage. It seems like you’re getting a great home for peanuts, but many deals that seem too good to be true may be just that. So, you’re smart to be asking questions. There are a number of possibilities about your new home that could range from annoying to financially unviable.
First and foremost is the fact that a bank, not a person, now owns the home. They’ve never lived there, so they don’t have first-hand knowledge of any information that would be handy to disclose. Also, check to make sure the previous deadbeats didn’t leave any outstanding liens or judgements against the property (such as back taxes) before they skeedaddled. You may be held responsible for settling those up before you’re allowed to purchase the home.
As for having sat unoccupied for a while, there is definitely a risk of damage from the elements, mold, or infestations. Maybe the place has been stripped by the previous owner or vandals. Or, just the opposite, maybe the former tenants left a bunch of furniture or garbage behind which will now be your responsibility to sell at a rummage sale. Either way, a home inspection is definitely in order.
I won’t say that every foreclosure deal is a money pit, but you certainly need to keep your wits about you. Listen to the inspector, talk about it with your realtor, and above all, follow your gut.