Abandoned homes are those that a property owner has voluntarily left. Typically, properties are considered abandoned when the homeowner has not lived in the house for several years.
In order for there to be an abandonment, there must be ample evidence that the homeowner has relinquished their rights and control of the property.
When property owners are not able to be reach for a period of time, the house can be seized via a court action.
If you are looking for a bargain, abandoned homes can look like an attractive option. Abandoned houses have been vacated by their owner, often for financial reasons, and can be purchased at low cost.
Though since these homes have been abandoned, they are often not in very good condition. This could be an opportunity if you have the finances to pay for the renovations.
Sometimes abandoned property is in relatively good condition, with the owner looking for a short sale before foreclosure. This could give you a home in decent condition, below market value, that you could sell for a profit.
How to buy an abandoned property
Buying a house that has been abandoned or unclaimed is similar to buying any other type of home. While the initial purchase price might be lower, renovating the property will involve expenses.
You must ensure that you have the finances to cover the purchase and renovation costs. You will also need to get preapproved by a lender to fully understand how much you can afford to spend. This will also make it easier to actually purchase the home.
203k loans can be the perfect financing for these types of homes that are almost always fixer upper properties.
Finding abandoned homes for sale
Many abandoned homes will have been in the early stages of foreclosure when their owners abandoned them. While the lender might not have started foreclosure proceedings, the homeowner decided to vacate the home before they had to.
When you check property listings, don’t expect to see homes listed as abandoned. Instead, look for phrases like “immediate possession” and “below market value” and similar terms. Anything that suggests there isn’t anybody living on the property and that an urgent sale is sought could indicate abandoned houses.
Your real estate agent should be able to help you find abandoned houses and be able to advise you on the law relating to them. If a property appears to be abandoned but isn’t listed for sale, you might want to check the statute of limitations regarding unclaimed homes.
Also, checking with the county clerk’s office should reveal details of the homeowner and whether there are liens or tax problems related to the property. This could help you find the owner so that you can ask them to buy the house. If there are any liens or other issues, the owner might be more willing to sell for a good price.
Biding on a home that doesn’t have an owner
If your lender has preapproved you and you find an abandoned house you are interested in, you need to do some research to check the costs of renovating.
Before considering making a bid to the owner, you need to be very clear on the costs involved and the repairs required. Having a thorough inspection of the home is essential to ensure you aren’t purchasing somewhere that should be torn down. Some properties in foreclosure will be sold as-is and a hiring a home inspector will not be possible.
Your real estate agent can also help you understand what other costs you might face so that you don’t bid too much for the property. While buying an abandoned property does have some risks, it also offers excellent opportunities as long as you do your research and understand the costs.
Abandoned properties are just another option for potential home buyers, especially when inventory is low. However, with these types of homes it is vital to be extra cautious and do proper due diligence before moving forward with a purchase.
Hiring a real estate attorney could be a prudent move to check the history of the home, including a title search. Getting stuck with a myriad of problems could cause a financial nightmare.
Bill Gassett is a nationally recognized real estate leader who has been helping people buy and sell MetroWest Massachusetts real estate for the past 35 years. Bill is the owner and founder of Maximum Real Estate Exposure. For the past decade, he has been one of the top RE/MAX REALTORS® in New England.