Purchasing a foreclosed home might be a deal of a lifetime. However, it can also be a huge mistake if you do not get it inspected prior to close of escrow

The “buyer beware” (caveat emptor), is especially important when buying a foreclosed home.

At Benchmark we are finding that 25-35% of the foreclosed properties we inspect are extensively damaged or appliances, fixtures and even habitable items such as heating and air conditioning are removed. Think of two different scenarios.

First, when you are involved in a standard (not a foreclosed home) transaction all parties have an interest in seeing the offer, counter offer and acceptance through to the end and all can be happy. When things pop up because of an inspection that were unforeseen, sellers are normally willing to negotiate, lower the price for repairs or make those repairs themselves prior to close. Sellers in a normal home sale want to avoid having a buyer come back after the sale and complain about problems that weren’t disclosed before the sale.

The other scenario is a foreclosed home, which is owned by the bank. They have already put the price out as a pretty much drop dead price with no hopes of them fixing anything and selling the property “as is”. Also, as a matter of simple fact, the bank has no idea what the true condition of the home is. Think of the home as a box. The bank has thousands of boxes they need to get rid of and as fast as possible. Otherwise they are paying property taxes on all those boxes. They need to just get rid of these boxes.

Imagine all the things that scenario #1 provided but now are “as is”. There may have been a renter in the home with out of state owner. Renters are not happy. If the bank has to move out the current owner often they take it out on the bank and the home. That water heater that has failed, or the broken down air conditioning (3 units let’s say), or perhaps the roof they knew needed complete replacement, they could care less about. While they are still mad, why not take all the ceiling fans out and kitchen appliances. One last thing is foreclosure signs on houses can be a green light for vandals or squatters to take up residence on those cold evenings. This foreclosure process can take several months, for the bank to complete. Meanwhile the angry owners could care less if things are broken.

Easily 65-75% of all inspections that Benchmark performs currently are foreclosures sadly. Some buyers are getting tremendous bargains and we can verify this.

A highly trained and experienced home inspector can be your greatest friend during this due diligence period prior to close of escrow. A professional home inspection is a very small investment during this time of getting a great deal to make sure you are not walking into thousands of dollars in repairs or a “money pit”. That great deal that you were getting for the house can be lost on these repairs.

Spending $300 - $400 on a home inspection is a total bargain in the larger picture of purchasing a foreclosed property.  If ever there was a need for that good ole “piece of mind” it’s getting a home inspection on foreclosed real estate.

“See Ya At The House”