I’m thinking about buying a foreclosed home. Are there any special items to consider?
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Yes there are special items to consider; buying a foreclosed home is much different than the typical home purchase.
Here are some things to keep in mind:
- The utilities must be turned on and in working order prior to the lender issuing a mortgage approval.
- Unlike other home purchases, sellers of foreclosed properties are not required to provide you any disclosures in relation to the condition of the property.
- Because of the aforementioned lack of disclosures, it is in your best interest to hire a certified inspector who can provide you with a full inspection and notify you of any repairs that may be needed on the property. Without an inspection, you won’t be able to estimate the cost for repairs.
- If there are repairs needed, you can negotiate a sellers concession to allow for these items. Depending on their extent, these repairs may be approved for completion after closing.
- Another item to keep in mind is that some sellers will charge you a daily fee if you do not close by the expected settlement date.
- Make sure that your earnest money deposit is refundable if the purchase does not go through. (Property auctions typically require a non-refundable deposit.)