What To Do When You’ve Bought A Foreclosed House

You may be thinking you’ve scored the deal of a lifetime by buying a foreclosure only to find out you bought a headache. Whether it’s an investment property or a home to live in yourself, a foreclosure can bring a unique set of challenges.                                   

With the looming recession upon us, it seems like a good time to be buying. And you will certainly find some good deals especially if this is your first time buying a home. But, you need to beware as they could bring some pitfalls along with them that will make it a challenge. If you are aware of the possible problems beforehand then you can avoid some costly mistakes down the line.

In this article, I will go over several of the things you need to be aware of before buying a foreclosure and what to do after you’ve already bought it.

1 - Change the locks and security system

How to alarm your home will depend on your budget, but it’s something you should do right away after you've been handed the keys. Chances are that your house may be located in an area with other foreclosed homes and they may be left vacant for a while. This opens that area up to crime and attracts thieves when your house is now clearly inhabited.

Invest in smart locks when changing the locks so that you can change the password often for added security. Cameras with motion detection that can be operated remotely are also a good idea so you can see if somebody is lurking around. And of course a loud alarm that is connected to the police is also a good idea.

2 - Check the plumbing

Unfortunately, most people that are going through a foreclosure know that it is coming for a while. And because of this they tend to let repairs go since they don’t want to spend money when they will soon be living elsewhere.

This can mean some issues with the plumbing. Make sure that you have the plumbing inspected as there may be some leaks or clogs in the system. This can mean backed up sinks and tubs and other issues.

One potentially major issue is mold from any faulty plumbing that can be a pain to clean up and expensive. Look out for cheap repairs that were not done properly. If the house is older than 30 years old, you should also pay for a sewer scope. There may be roots growing into the sewer pipes that will block it and damage the pipe.

3 - Check the utilities

The house likely has been sitting empty for quite some time and may have had the utilities turned off. If you live in a cold climate zone, then this can mean that the pipes were frozen as it is unlikely that they were winterized.

Ask if the utilities were kept on while the house sat and that they were working. Unfortunately, if bills there went unpaid you may need to pay a fee to have them turned back on. Also, some municipalities require an electrical inspection on foreclosed homes before they will allow the utilities to be turned back on.

4 - Do a home inspection

This last section applies on any home even if it is not foreclosed on. But, in the case of a foreclosure or a house bought at auction, it is essential that you have an inspection done before you make an offer. You really need to know what you are getting into before you make an offer so you can decide if it is worth any of the unexpected problems you may face.