Cracked foundations, holes in the wall, stained carpets and functionless appliances are just some of the problems buyers of foreclosure properties are dealing with after finding what they thought was a deal.
With hundreds of homes in foreclosure, many buyers think they'll strike gold by finding a home for less than 50% of it's value. In arecent auction, an Uptown condo valued at $180,000 was sold for $90,000 but experts say most foreclosed property is in the 80-90% of value range.
It's still very tempting to buyers --- 90% of a $200,000 home is $20,000 off, after all -- but those ready to plunk down the cash should be as careful as they are joyful about their new purchase.
Some foreclosure properties haven't been lived in for months and could have much needed repairs. The trick is to know what you're getting into.
"Get a professional inspector," says Craig Lemmon of Real Estate Inspections of Texas. Lemmon says the $300 to $400 you might spend on an inspection could save you tens of thousands.
"Ask questions of the inspector," Lemmon suggests, "ask 'Are you going to inspect everything or just the standards?'"
Just the standards may discover problems with the foundation, but not tell a buy anything about the interior elements like carpeting. Lemmon told us about homes he'd inspected with up to $100,000 of damage -- usually from upset owners who can no longer afford their home.
One example included a home that had it's toliets cut out, whirlpool bath removed, and carpets taken from the floor. Lemmon also told us about homes that had been stripped of ceiling fans, air conditioning systems, and copper wire.
Some buyers have been able to negoiate the price of a home after finding out how much it will cost to fix the damage -- but that very good deal could be a real dud after discovering the needed repair issues.
