Inspect Foreclosed Homes Before Buying- By: John Cutts
Before signing the contract to buy a foreclosed home, do a home inspection first. The bargain price of the house might be attractive, but the cost of repairs might surpass your estimates.
In Tarrant County, there are about 1,000 foreclosed homes available for sale. While these are priced at very attractive bargain prices, exercise caution because Texas does not require disclosures in real estate sales. Oftentimes though, list prices are lower than tax appraisal values and most mortgage lenders accept purchase offers below their listing prices.
If you plan to take advantage of the bargain prices of foreclosed homes in Tarrant County, do your own research and learn about home inspection and repair costing. David O’Brien Jr., head of home counseling nonprofit Housing Opportunities in Fort Worth, said the phrase buyer beware is a fitting advice to prospective buyers of foreclosed homes.
The case of Tom Viola, founder of Abode Property Inspections, is a good illustration for lessons in buying foreclosed homes. Viola bought one unit among foreclosed homes in Hurst in 2008. The house was offered by the bank at $241,000, but was sold to Viola at his offer of $225,000. The bank also paid for the closing costs.
Being a home inspector, Viola expected that he was going to spend some more for repairs on the foreclosed house before it becomes saleable. He advises buyers of bargain foreclosed homes to expect a lot of damages, a lot of defective equipment and appliances and vandalized parts of the homes.
Viola said most foreclosed homes offered for sale are less than ten years old, but many of these units have air conditioners that have been ripped and walls that have lots of holes. Also, most foreclosed homes have been unoccupied for many months, causing deterioration.
Viola advises prospective buyers to hire professional home inspectors. Home inspection does not cost much, in comparison to the benefits gained by the buyer. It varies from only $200 to a high of $500.
Viola recommends home inspectors who work full-time in home inspection, who are licensed by the state and who is a member of either the National Association of Home Inspectors or the American Society of Home Inspectors.
In addition, O’Brien advises potential buyers of foreclosed homes to attend home buyer education sessions offered by Housing Opportunities under Neighborhood Stabilization Program in Fort Worth. The city’s home buying initiative provides down payment aid to eligible first-time home buyers who plan to buy foreclosed homes in certain areas of the city.
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John Cutts has been educated in the finer points of the foreclosure market over 5 years.