The real estate investor hopes for the best. But in the case of the foreclosure purchase, should be prepared for the worst. The negative side of a foreclosure purchase can be the property’s condition. Catching the property in the pre-foreclosure stage could mean the structure’s exterior and interior are in reasonably good condition. The longer the property has been in foreclosure, months or even years, can mean that the structure is in a deteriorating state, having had little or no maintenance for a prolonged period of time. Such properties could be sold as-is so that issues such as mold growth, plumbing deterioration, biological infestations, vandalized appliances and heat systems may exist. If the property is sold as-is, no repairs can be requested as a contingency of the sale.
Another red flag which can be averted is the potential for the buyer to become responsible for any debt connected to the property. Unpaid taxes, outstanding construction loans, or additional lines of credit which were taken out on the property are additional financial burdens which can be revealed with the help of the Terry Baltes Commercial Realty team. In the event that there are tenants in the property during the foreclosure proceedings, eviction proceedings could become a problem. Time and money could be involved in the removal of unwilling occupants, who could also cause more damage to the property.
Extra paperwork and bureaucratic delays can be frustrating. There is also the present danger that the lender could cancel the financial contract, or even accept a better offer.