Specialized Buyers Agent Answers Real Estate Questions
Q. I am looking for good real estate investments and want to buy a home at foreclosure sale. What should I be worried about? T. Selig, Ardmore, PA
A. Everyone has read that book about making millions in real estate, I guess. The major risks on a foreclosure are that you do not have a chance to inspect the property condition to see what structural or other issues might be present. Worst-case scenarios might include a basement full of oil from a broken fill valve, hazardous waste in 50 gallon drums in the attic, previous fire damage, mold or asbestos. Another risk is that there are title problems that are not cleared by the sale. These could include claims of unpaid workers or easements that would prevent future expansion of the home. Occasionally, the homeowner will not move out and you have to spend money for a legal action of eviction.
I would categorize this type of real estate investing as high risk with a potential for high return– not for the faint of heart.