It is common to find newly rehabilitated or, rehabbed homes on the market that were previously bought as foreclosed properties by investors. These homes are renovated and re-enter the residential real estate market with the investor in position as the seller. A reputable investor will have performed all renovations and improvements to code with proper permitting and paid all contractors in full. Is this always the case? Well, not always. However, don’t let that deter you. There are a few simple precautions potential buyers can take to assure their purchase of a newly rehabbed property will be unencumbered by incomplete or non-existent permitting and free of any shoddy workmanship or outstanding liens from contractors.
Make Friends in High Places- Contact the Homeowner’s Association to introduce yourself and express your interest in buying the property. Not only can you ask if there are any outstanding fees still due on this property, you can also gain information about the homes history from the very people who govern the community.
Call in an Expert- A home inspector will be your saving grace in this situation as his expertise is well worth the fee charged to safeguard the buyer from potentially costly and long-standing issues. The inspector can catch inexpensive cover ups that could potentially be hiding costly issues. An experienced home inspector will know if the workmanship and materials used are up to par, installed correctly and will perform as per their warranty. Mold can be an issue with homes that have remained vacant for long periods of time and your inspector can identify potential trouble spots. A home inspector will have the knowledge, experience and advice to help you proceed as an educated buyer of any home, including one that was once a distressed property.
Get it in Writing- If there are structural improvements or additions to the home insist on proof they are up to code and all permitting has been satisfied. In addition, request for proof that all contractors are paid in full. You can also visit the local city and/or county government agencies and ask for assistance in confirming there are no issues outstanding on the property. Your attorney can assist you in reviewing the title insurance policy to confirm that the foreclosure itself was properly and fully concluded, free of any outstanding issues.
Speak to Those Newsy Neighbors- If you see curious on-lookers from adjacent properties, offer a friendly handshake and introduce yourself. These neighbors probably knew the previous owners and observed the home throughout the foreclosure and rehab process. They may offer unknown information that could encourage or discourage your decision to buy the previously distressed property.
As the saying goes, “caveat emptor,” let the buyer beware. Distressed properties that return to market as newly improved homes can be a fantastic purchase, nearly like a new home. With a bit of legwork, you can forge happy new beginnings in a rehabbed home, resting assured you’ve made an intelligent purchase, likely to bring you many satisfying years as a homeowner.
Copyright 2013: Valerie Anne Martinetti