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Today, we'll speak about the downfalls of purchasing a distressed property. A lot of people think that these homes are good deals, but there are some things that you need to be aware of prior to purchasing them.
1. Buy a clear title to the property: I have seen people purchase foreclosures that have outstanding liens on them from the prior owner. You will be liable for these liens once you buy the property.
2. Some lenders have troubles getting a loan because of the condition of the home: The lender will want certain parts of your property to be in good condition. This includes the roof and the foundation of your home. Wood-destroying insects can also be a worry if you're trying to get approved for a loan.
3. Not examining market trends: People don't often examine where the market is moving. Is there appreciation? If you buy a home in an area where homes are losing value every day, then purchasing a distressed property may not be the best idea for you.
4. Unforeseen damages and deferred maintenance: This probably seems like common sense, but I've seen some bad situations arise. I have a lot of horror stories about this happening to people who have bought distressed homes, so you need to be careful not to cut any corners when you're doing renovations or making repairs.
Hopefully this information has been helpful to you! If you'd like to learn more about real estate in Austin, please don't hesitate to contact me!