How To Buy Abandoned Property
Here's what you're going to need to do.
1. Make sure you can make a legitimate offer
Even though the property is abandoned, it still has a certain value to it. Unless you've got the cash to cover the purchasing price, you'll need to qualify for a mortgage to make an offer on it. Check with a local bank or credit union first because you'll likely get a better deal than with a national lender.
#2. Find the right piece of property
You probably already have a piece of property in mind if you're looking at this, but it is important to find the right property to purchase. Don't look in the classifieds for listings. Look in the public records for foreclosures or government websites for HUD properties that qualify for renovation. Deed records for a property can confirm that it has been abandoned or if there are any liens or taxes that may be on the deed.
3. Talk to the owner
If a foreclosure hasn't made its way through the court system, then the property owner still has rights to sell. Not every owner realizes this, especially if the property has been abandoned for some time. Call them up and make them offer – you might get an amazing deal! If it has already foreclosed, then speak with the lender.
4. Get an appraisal
Whenever a property is abandoned, it becomes at-risk for problems that can create costly repairs. Vandals can get in and steal wiring and copper. Plumbing can burst. You'll need a complete picture of what repairs will be needed so that you can get an accurate estimate of the home's value. Not only will this help you decide what a fair offer should be for the property, but you'll also know what kind of renovation expense you'll be facing.
5. Now make your offer
You may have a number of additional expenses that come with the closing of a purchase that involves abandoned property. There may be closing costs and fees that need to be paid and you may have specific moving expenses if you're planning on making this your primary home. Bid lower than what the appraised value of the home happens to be so that you won't lose your shirt on the overall costs of the home. Then you can schedule a closing date if your offer is accepted and plan on repairing the property.
Even if the offer you make isn't accepted, that doesn't mean you won't get the abandoned property you want. You may receive a counter-offer to consider that you can then counter with a new offer of your own. Some lenders may not approve a short sale, even if the property has been abandoned, because of the debt responsibilities of the owner and choose to enter foreclosure instead. If you keep plugging away, however, you'll be able to get a great property at an amazing price.
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