Many buyers see foreclosed homes as a smart investment or perhaps as a good way to get into a market that may be otherwise difficult to enter. While there can certainly be ample payoff in buying a foreclosed home, there are some challenges to consider. Here are some tips for individuals looking to purchase this type of property in Massachusetts.
- Work with an experienced team from the beginning: To help prevent unwelcome surprises, it is best for buyers to have a reliable team at the ready when looking at foreclosed homes. A lawyer, for example, can conduct a title search early on to make sure any outstanding liens or other obstacles are known in advance. In addition, some experts advise bringing an inspector or contractor to the auction itself to take a look before deciding on weather to bid.
- Be prepared at the auction. Individuals who think they may be bidding on a foreclosed home should come to the auction prepared with a certified check if needed. Many auctions require a $5,000 deposit, so it’s important to have that at the ready. In addition, doing research in advance, such as looking at when the property last sold and using this history to determine when the roof, plumbing and so on may have been last replaced, can be helpful in the determining a reasonable price.
- Consider renovations in the loan amount. Individuals buying a foreclosed home may wish to get a rehab loan, which can help cover necessary renovations. Having funds set aside to cover any surprises can be a good idea when purchasing a home in this manner.
Many people advocate for purchasing foreclosed homes, suggesting that these purchases are often a good deal. Others find the unknowns involved difficult to reckon with. As such, is important that individuals consider their own risk tolerance when buying a foreclosure. It is also strongly recommended for buyers to do the due diligence with a lawyer to prevent surprises related to titling or liens after auction.