4 Key Steps to Consider Before Buying an Abandoned Home
Updated on August 27, 2024 / 4 min read
Abandoned homes are properties left unoccupied for an extended period, typically one year or more. They may also include properties where the owners have forfeited their homeownership rights. Such spaces are often listed as “unclaimed property” when they are available for sale. This category is different from vacant and condemned properties. While vacant properties still belong to an owner but without any occupants, condemned properties are tagged as unfit for living by the local government.
1. Find abandoned homes for sale nearby
The first step in buying an abandoned home is to locate one. Several approaches can benefit when one searches for such homes for sale at cheap prices nearby.
-
Contact the local housing authority
Local government or housing authorities often maintain lists of abandoned properties that are available for purchase.
-
Search online
Several online databases provide listings of abandoned properties. For example, real estate websites display pre-foreclosure properties where owners have missed mortgage payments. To get these search results, one can simply look for “abandoned homes for sale at cheap prices nearby” online. But, it is important to exercise caution while using such resources since some search results might be fake or fraudulent.
-
Contact a real estate agent
Consulting a real estate agent specializing in foreclosure properties is the most convenient way to find abandoned homes for sale at low prices near one’s area. These agents often have direct access to listings of abandoned homes, which is usually not publicly available information. Along with such listings, the agents also have access to listing services that can easily provide details about abandoned spaces available for sale in a particular area.
-
Check with local property auctions
In many cases of violations of federal laws, the government or lending institutions such as banks take possession of a property. These homes are often sold off at auctions. One should contact local auction agencies to inquire if they have any abandoned homes for sale at cheaper rates.
2. Confirm if the home is abandoned
Before purchasing an abandoned home, it is important to verify its status through due diligence. This involves proper research to confirm if the house has been left unused. Most official sources, such as local housing authorities and real estate agents, already do their part to check whether a property can be tagged as abandoned. Still, it is important to do conduct some research to verify the same legally. To begin with, one can look at the various local property laws to understand the criteria for abandonment. The real estate board, which is regulated by the Secretary of State, is a good source to check for these laws and regulations. In addition, contacting the local county executive office to find information regarding the current property ownership will help.
3. Inspect the property
Often, a property that has been abandoned or foreclosed will be in poor condition and might require substantial repair work after purchase. There might be intense damage due to mold, infestation, or water. But sometimes, repair work might not be enough. The property might have to be completely razed down and rebuilt. To know all this information beforehand, it is important to bring in professionals to inspect the property before purchasing it. For example, one can consult an engineer to visit the house to inspect the plumbing, wiring, and foundation. If any repair or reconstruction is required, a quote must be obtained to determine how much money will be required to fix everything. This is because it is crucial to understand what one is getting into before making the purchase offer. It will help determine whether the property is a worthwhile investment or may become an expensive liability.
4. Set up the financing
Financing an abandoned home is slightly different from buying a new house. For starters, one needs to determine the timeline of the payment before committing to buy the property. This is because the payment method generally differs based on how the property has been purchased. For example, if the abandoned house has been purchased through an auction, one will need the financing upfront to close the deal immediately. But, when purchasing a property from a lending institution or through the government, one can make the payments in various installments.
Alternatively, when one purchases the abandoned property directly from the owners, one will have more time to work out the financing details. In any case, it is best to get a pre-approved mortgage before looking for abandoned homes for sale. This way, one has a fair idea of one’s budget and the lender’s requirements.
FAQsWiki's Top Reads
From the next best thing in fitness, to the latest DIY craze, to finding your next holiday destination - you won't have to look any further than here.
