Home Buying in Little Elm>Question Details

Smithfam, Home Buyer in Newark, NJ

What arE hidden cost when buying forclosed homes?

Asked by Smithfam, Newark, NJ Wed Nov 21, 2012

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No different than purchase of a normal home.

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Lynn911 Dallas Realtor & Consultant, Credit Repair Advisor
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0 votes Thank Flag Link Thu Nov 22, 2012
Foreclosed home vs normal resale.
Often on foreclosed homes the buyer will have to pay for a survey, HOA transfer fees, home warranty.
Also lenders rarely pay for repairs, so even though you can do an inspection in most cases, if you find repair items they are normally at your expense. In a normal equity sale, it is not uncommon for sellers to pay for some repairs.
Also in a normal sale utilities are normally on. On foreclosures it is often the buyer expense to turn them on and perhaps turn them off at the end of the inspection.
So there can be additional costs. These are not necessarily hidden costs, but different as to who pays.

We also find if the buyer's lender does not close on time there can be penalties added per day or per diem for everyday you close late. Often with a normal seller these can be waived.
I often see that foreclosures were neglected for some time before and after the foreclosure. It just depends on the house. This can mean added long term maintenance issues. You can have the same issues in a normal sale , but I just see them more often in a foreclosure sale. Maintenance items like air filters not being changed, yard (foundation) not watered, AC and Heat not serviced, etc.

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0 votes Thank Flag Link Wed Nov 21, 2012
Bruce Lynn, Real Estate Pro in Coppell, TX
The risk of buying foreclosed homes is the unknown. So, therefore, beyond the evident repairs, there are often many other risks that are not known until after you have purchased and lived in the home. To evaluate some of the risks, you need to run a title search and have a licensed inspector to thoroughly inspect the home. Then, you have to make a calculated decision on the price to pay. Expect competition. If the home is a foreclosure and has been on the market for a longer than average period of time, be extra careful.

Brent Rice, Top Recommended Broker
The Rice Group, Inc.
Website: http://www.ricegroupinc.com
0 votes Thank Flag Link Wed Nov 21, 2012
Hi Smith's-

That can be a loaded question! It is difficult to say but based on my experience, I have encountered several hidden costs that came up in the problem with the home when my buyers were remodeling. An electrical issue and a crack in the slab of the foundation that needed addressing.

Like with any preowned home, you never can account or plan for hidden costs. You just have have to use good judgement on the type of foreclosure you want and make sure you have an exceptional inspector with foreclosure experience.

I'm currently working with several investors purchasing foreclosed homes. I would be happy to assist you too!

Feel free to text, email or call me anytime.

best regards,

Sherry Renfroe
Ebby Halliday Realtors
(214) 215-4145
Mobile Site: m.sherryrenfroe.com
0 votes Thank Flag Link Wed Nov 21, 2012
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