Foreclosures can be a great value, but they are usually sold as is. Here is how to protect yourself.
Key takeaways
- Most bank owned homes are sold as is, so the inspection is for your information and budgeting.
- Vacant homes often have hidden moisture, plumbing and electrical issues.
- Make sure utilities are turned on for the inspection.
- Get contractor quotes for major items before your inspection period ends.
Foreclosures and bank owned (REO) homes can be good opportunities, but they come with more unknowns than a typical sale. The seller usually has little history on the property and sells it as is.
Why vacant homes need a careful look
Homes that sit empty in Florida's heat and humidity can develop problems quickly. Air conditioning may have been off for months, leaks may have gone unnoticed, and fixtures or equipment may have been removed.
Common findings
- Moisture damage and visible growth from leaks or high humidity
- Missing appliances, fixtures, wiring or copper
- Plumbing damaged by neglect or improper winterization
- Roof and HVAC systems with deferred maintenance
- Pest activity and wood damage
Get the utilities on
Many bank owned homes have utilities shut off. Without power and water, the inspector cannot test systems or look for leaks. Ask your agent to request that utilities be turned on before the inspection.
Plan for insurance
Older or neglected homes may have trouble passing a 4-Point Inspection. Knowing this early helps you line up financing and coverage.
Budget with real numbers
Use your inspection report to get quotes from licensed contractors for big items. Knowing the likely cost of repairs before you commit is the best way to make sure a good deal stays a good deal.
Frequently asked questions
Can I negotiate repairs on a bank owned home?
Banks rarely make repairs, but inspection findings can still support a price discussion or help you decide whether to proceed.
Do I need a separate termite inspection?
It is a good idea. Wood destroying organism inspections in Florida are done by licensed pest control companies.
