What should you expect when buying a foreclosed (bank-owned) home? Real estate investing and home flipping guru Jen Kuznits was kind enough to sit down with EveryHome and share a few helpful tips.
First and foremost, bank-owned properties are a great opportunity to buy a house at a discount. These homes have gone through the foreclosure process and are now being listed for sale by the bank. While these homes can be purchased below market value, there are a few things to consider.
As Jen explains, the buyer must be aware that in most cases, these homes have been vacant for many months (or even years!) before the bank finally lists them. Banks do not heat or cool the homes, which means that there is no regulated air flow. Unfortunately, this can result in mold, buckled wood floors from dampness, and even cracked foundations. If there was any water in the basement, and it froze during the winter, it will push against the walls, and can compromise the structural integrity of the house.
Plus, homes are usually foreclosed upon because the former owners could no longer afford to keep them. That means regular maintenance was usually not done on the property. To be safe, Jen recommends always assuming you will need a full roof replacement, electrical upgrade, new kitchen, new baths, new flooring, and new heating and cooling.
It’s even more important to obtain a thorough, quality home inspection when purchasing a bank-owned home. Be sure to carefully choose a home inspector and consider seeking out a company that uses thermal imaging, which is one of the best ways to detect any moisture.
