Foreclosures can be a great opportunity for home buyers if the property is in good shape. Whether you are interested in buying a foreclosure to live in, to rent out, or to buy and flip, these properties can offer a well-priced alternative to buying other properties. But foreclosures can be a bit of a risk. Since the last owners were unable to make payments on the house, they may not have put in the time and money for updates and maintenance, and sometimes foreclosures can sit empty for a long time. Depending on the type of foreclosures you are looking at, some will allow for an inspection before purchase and others won’t. If you have the option for a foreclosure inspection, you should take advantage of this.
What Home Inspections Of Foreclosures Can Help With
Safety
Foreclosed homes that have been sitting out of use for a while can have serious issues that may be unnoticeable from the outside. It is possible that there is a carbon monoxide leak, weak structural elements, mold, or other hazards in the home. An inspection ensures that it is safe for you and others to enter the home and complete any necessary renovations. An inspection can also help you determine if areas of the home can’t be renovated, such as which structural elements are load bearing.
Cost Of Renovations
Some foreclosures may only require a new coat of paint and some new locks, but other foreclosures can require lots of work. A home inspector will be able to identify any issues with the homes that will need renovations before it is liveable. Knowing what needs to be immediately remedied will help you establish a budget for renovations while determining what cosmetic renovations you can afford after the home has received the necessary renovations. While you may be able to identify some red flags when buying foreclosures, a home inspector will be able to detect other, more difficult to notice issues that need to be addressed.
Potential Legal Issues
There is no guarantee the last owners of the foreclosure followed the law while building or renovating the home. You will need to know if a foreclosure is up to the standards laid out by the city of Calgary so that you can avoid any legal ramifications. Any additions to the house may also influence your taxes, insurance rates, and the overall value of the home. For example, if the foreclosure does not meet the land use bylaw specifications or if the home has unpermitted rooms, this will need to be addressed by the new owner.
Learn More About The Home
Foreclosures often don’t come with as much information as regular sales and most foreclosure buyers aren’t able to speak with the previous homeowners. Because of this, buyers likely won’t know when different appliances were put into the home and what condition they are in. A home inspection can shed some light on when different items, such as the hot water tank or shingles, might need to be replaced.
Find Top Quality Foreclosures In Calgary
Foreclosures can be a complicated real estate investment. Interested parties need to know all of the complexities of buying foreclosure properties and they need to know the potential associated costs. Although there is a perception that foreclosures are an affordable option, this may not be the case if you need to do extensive renovations or pay additional taxes. To help you navigate the complexities of foreclosures, partner with a Calgary Realtor® who is intricately familiar with foreclosures. The leading Calgary foreclosure experts of the Mel Star team will help you find a foreclosure in good shape and our experienced and knowledgeable team can professionally guide you through the whole process. To speak with a member of the Mel Star team of Calgary Realtors®, call 1-403-861-9944 or fill out the online contact form.
FAQ
A foreclosure property is a bank-owned home that is for sale. The previous owner was unable to meet their mortgage payments, therefore the bank repossessed the home and is selling it to recuperate the money still owed against the mortgage. To learn more about foreclosures and how to earn a profit from them, read Do Calgary Real Estate Investors Need To Hire a Foreclosure Specialist?
A pre-foreclosure home has not yet been foreclosed, but it is going to be. If you are purchasing a pre-foreclosure home, you will be buying it from the homeowner instead of from the bank. These properties can often be very affordable, as the seller has a short time frame to sell the house. Ask one of our Calgary Realtors® about the different options of bank foreclosures versus pre-foreclosure homes for more information and the pros and cons of each.
Typically there are two types of foreclosures: bank-owned and judicial sales. If you would like to find out more information about how they work and the differences between the two, contact us anytime and read Is It Better to Pursue a Judicial Sale or a Bank-Owned Foreclosure?
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