An abandoned property is usually one which is no longer in the possession of its original owner, and owing to this, certain abandoned properties are usually run down and in need of cleaning and repairs. However, in certain circumstances, an abandoned property can also be in good condition, and since the owner is still probably looking to unload it fast, this can be a great way to buy property at a discount, and benefit from a low-cost real estate purchase.
Before you head off to look for abandoned property to purchase, make sure you review your financial situation. How much money can you afford to spend? Keep in mind that when purchasing abandoned property, you also need to set aside money for repairs – there are bound to be a whole host of additional expenses in addition to the original sale price, and you are unlikely to find out about these until the sale is complete. You should also obtain a prequalification from your lender or bank, so you know how substantial a mortgage you can get, and ensure that you get preapproved.
If you wish to buy abandoned property, you need to look into finding a suitable one (unless you already have your eye on an abandoned property). Abandoned homes are frequently properties that are in the process of being foreclosed, but the process has not yet been initiated by the bank. Realtors specializing in this area are bound to help you out most effectively – they can get in touch with owners whose homes are about to be foreclosed (they are likely to be eager to sell as they will make more money this way), or banks (they prefer to have houses sold before they are repossessed). In addition, they can also accompany you to an abandoned home of interest, and help you figure out how much will need to be spent on repairs. However, if you do not want to hire a realtor, you can look through the classifieds – keep an eye out for words such as “must sell”, “below market value”, “immediate possession,” or “under appraisal”.
Once you have found the house you want, carry out an investigation to locate the deed records. Find out about its owner, the current appraised value of the property, and any tax problems or liens. After being preapproved by the bank, and having found out how much you can obtain as mortgage, you need to calculate additional expenses, take your financial situation into stock, and then present your bid to the to the seller. In order to calculate additional expenses, you will need to have the home inspected and appraised. Have an engineer or architect look it over, and then add in title insurance, appraisal fee, closing costs, lead and pest inspection fees, and any other legal costs. It is a best to bid lower than what the house is actually worth.
If your offer is accepted, proceed to schedule a closing date, and start the preparations for renovations and repair.