Thinking about buying a foreclosure home - any advice?

Question

Is there a way to get a warranty to protect me if something is discovered? I believe the purchase is "as-is."

Should I look into a good inspector who can go through with me and make sure I'm aware of any problems? Are there inspectors out there who aren't simply puppets of lenders/realtors, who can really give me a good idea of what I'm going to be dealing with?

Account Closed · Answer

Look for an inspector who is reputable. Try the better business bureau or angieslist.com. It looks better if they do inspection full-time and not just a part-time gig.

Monica Breckenridge · Answer

If you are buying a house at the PT sale or Sheriff's Sale you don't even get to go into the house. Buying at an auction is very risky. Depending on the type of auction you go to. If this is your first deal I don't recommend buying an auction house unless you are seasoned or know all the risk with buying a home at the auction.

Things to consider when buying at the PT sale:
1. You don't get title insurance
2. You need to get an o&e to see which lien is foreclosing. The lien that is foreclosing could be the 2nd mortgage. You can tell by looking at the reception #.
3. If any judgements or liens were recorded after the NED date, these don't get wiped off at foreclosure
4. If there are judgements or liens be careful-I've seen investors buy a house and then get redeemed by the judgement or lien because somebody bought them out
5. You won't be able to see the interior of the house, so you never know what your getting into. The house could have frozen pipes, mold, water damage, structural. You should assume the worst case minus structural. You can usually see on the outside of the house if it has structural issues
6. You usually don't get a good deal at the auction. Every investor who has cash is going to bidding against you. Meaning your profit will be less. There are other ways to buy houses with no competition and still get a smoking deal.

J Scott · Answer

You won't be able to get a warranty to protect you when buying a house (a home warranty may protect you from little stuff, but probably not big stuff), and when you buy a foreclosure (or any property), you are taking a risk.

If you're not comfortable assessing potential problems yourself, you should definitely get a home inspection. Yes, there are plenty of good inspectors out there, though there are plenty of bad ones as well; I wouldn't say they are "puppets of lenders/realtors," but many of them are just not very qualified. Find a good one and you should be able to determine most of the issues a house might have.

That said, there are always risks and there's always teh potential that an inspector won't find everything -- if you're not comfortable with that risk, you probably shouldn't buy the/a house.

Thinking about buying a foreclosure home - any advice?

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