Buying a foreclosure can be risky. Foreclosed homes have many potential pitfalls. Performing some due diligence can help you decide whether the property is truly a good deal or not. Here are 5 things to check before buying a foreclosure in Massachusetts.
1. Determine Occupancy
If a home is occupied, you will be responsible for eviction. Massachusetts laws favor tenants over landlords, so eviction is not an easy or quick process. Be sure to include these potential costs into your financial analysis.
2. Check for Liens
Determine whether there are existing liens on the property. Some liens are not cleared when a home is sold at foreclosure. You would essentially be responsible for those liens when you become the owner. There are 2 places to check for potential liens. First, visit the local registry of deeds and search for all records related to that property. Secondly, check with the local city or town for utility bills and back taxes owed. These two public sources are great resources for this and other information on a property.
3. Research Previous Listing Details
You may not have access to the interior of a foreclosed home before deciding whether to buy it. However, if the home was previously listed for sale, you may be able to find some old interior photos. The condition is likely much different than what is seen in those photos, but they can still provide helpful information on the layout and features of a home. For instance, perhaps town records list the home as a 3 bedroom from past photos clearly show that there’s a 4th bedroom.
4. Inspect for Structural Issues
Although you might not be able to access the interior of a home, there is still much you can learn from the exterior. Look for signs of major structural or other issues. Performing a visual exterior inspection is a must before buying foreclosed properties. If the exterior is in rough shape, you can expect much of the same or worse on the interior.
5. Determine Market Value
Lastly, do your research on the market value of the home. Compare those figures to what you estimate for repairs and other expenses. What is your expected return once the home is repaired? Does that potential profit offset the risks of the unknown? No investment decision is complete without a detailed financial analysis and knowing where you stand both before and after your work is completed. Learning about the local market is a critical and necessary step to buying a foreclosure in Massachusetts.
More on Buying a Foreclosure in Massachusetts
If you are interested in buying a foreclosure in Massachusetts, be absolutely certain that you have the information that you need to make smart home buying decisions. Above are just 5 things that you can check. There are many more considerations when it comes to foreclosures. Consider working with experienced local professionals to help you navigate the process and avoid the pitfalls. Contact Martino Law Group today for assistance!