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What to Watch Out For When Buying Up a Foreclosed Property



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By : Jacquelyn Marks    99 or more times read
Foreclosures are a great investment for those looking to enter the real estate market as a landowner. These home foreclosures, however, are often sold “as is,” meaning that you get what you see. This presents a series of problems for the careless buyer, as faults and defects could easily turn a potential investment into a financial nightmare.

If you are going to buy foreclosed properties in the near future, then you will definitely want to keep an eye out for the following issues:


Compromised structural integrity

The first thing you have to look at is the condition of the house or structure itself. You can get a lot of information by simply visiting the site and taking a look at the structure from the inside and the outside. You will, however, want to look at the insides if the structure. Crawling into access panels and peering down random holes will let you see whether wood is rotten, cement is cracked or steel bars bent out of shape.


Plant and animal infestation

Another deceptively easy problem to overlook is the presence of pests and infestations. Rats, roaches, termites, mold, mildew and even moss are not only icky – they can also pose some serious health and structural hazards. Mold and mildew can release toxic spores that cause an array of respiratory diseases, while pests can eat away at the structure and leave waste material that harbors deadly microorganisms in turn.


Grounded or disconnected wires

Loose wires with live currents flowing through them are very dangerous problems that only very attentive and experienced homeowners can spot. One, new occupants that have no idea what to expect can easily touch one of these live wires. Two, the wires can expose flammable materials to heat or sparks that can start a fire. Three, grounded wires eat up electricity and can slowly but surely add to electricity bills.


Leaking or rusty pipes

Leaking pipes directly release this water into various parts of the home, while rusting pipes can burst at the slightest pressure. This loose water can do a lot of damage over time to almost everything in a house, especially to wood and concrete. It also poses a serious electrical risk as it can creep up to live wires and loose connections; electrocuting anyone unlucky enough to come into contact with the water. It even breeds fungal growth and raises the water bills for a quadruple whammy.


Lacking or dubious documents

You may be a whiz at repairing homes, but that will be all for naught if you possess a fake title or a legit title with the wrong signature on it. You have to painstakingly read every little document that comes your way. This is especially important for foreclosure properties, as they usually come with a lot of legal junk under the hood.


Existing occupants

Only purchase aforeclosure property with an occupant still inside if you have the stomach for evicting people and are well-versed in the relevant laws. This can be a very difficult and stressful task for first-time foreclosure investors, so lay off the occupied homes until you know exactly what you are getting into.
Foreclosure.com is the online leading provider of distressed property listings.

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