Thinking about buying a foreclosed home?

On Behalf of | Sep 1, 2020 | Real Estate Transactions |

Louisiana residents who are hoping to get amazing deals on home purchases often look at foreclosed properties. While the price tag may be enticing, buying a foreclosure can be risky. Here are a few of the downsides to buying a foreclosed home.

Number one: Questionable real estate owned contracts. REO contracts written by lenders are very basic and do very little to protect buyers. These documents are written with only the lender in mind and can be very one-sided. Rather than signing one’s life away for the sake of getting a good deal, take time and read the contract terms carefully.

Number two: Permitting issues or code violations. Before buying a property, it is good to know if there are any existing permit issues or code violations. This information can be obtained by contacting the city. It is also a good idea to consider having a land survey completed.

Number three: Poor property condition. It is not uncommon for homeowners who are losing their properties to foreclosure to let their homes fall into disrepair or even cause damage themselves. Lenders may do little to repair the damage or do just enough to hide any major problems. Get an inspection.

When buying a foreclosed home in Louisiana or elsewhere, it is good to be selective. Looking at the price alone could end up costing a buyer a lot more in the long-run. Take time, do one’s due diligence and, most importantly, seek assistance reviewing the purchase contract. An experienced real estate attorney can help make sure the agreement offers the appropriate protections and, if necessary, negotiate new terms if the contract is lacking.