WALLINGFORD, CT, May 01, 2010
/24-7PressRelease/ -- BBB is cautioning consumers about the downside of purchasing foreclosed property.
Connecticut Better Business Bureau President, Paulette Scarpetti says these properties may carry some unpleasant surprises.
"Foreclosed properties are being sold at below-market prices so investors see this as an opportunity to get their hands on prime real estate bargains. The problem is some properties are not available for inside inspection before sale, as is the case at most foreclosure auctions."
This kind of "blind purchasing" puts the buyer at a disadvantage, depending on the condition of the property when it was abandoned.
Some buyers have ended up with homes that had been stripped of plumbing pipes or light fixtures, and in some cases the interior may have been trashed by the previous owners. For that reason, buyers would do better to purchase a property put on the market by a homeowner facing foreclosure, before the lender completes the foreclosure process.
Connecticut Better Business Bureau says education is crucial to avoiding a nightmare real estate purchase:
•Know your options: Pre-foreclosure sales allow you to purchase a house directly from the homeowner before it goes into bank foreclosure.
•Lenders may sell properties using an agent who specializes in such properties.
•Conduct a title search. This process, usually carried out at a county courthouse, will reveal whether the property has a second mortgage or lien against it. If it does, you may be responsible for paying off the initial mortgage, any second mortgage loans and liens on the property before you can take ownership.
•Properties sold at auctions are usually sold "as is." This can create problems when trying to obtain a mortgage if the property won't pass inspection.
•Obtain help if you need it. Find a real estate agent who is experienced in foreclosures and check him or her out with your BBB (www.bbb.org). BBB offers free Reliability Reports on more than 3 million businesses and professionals.
•Have your agent check nearby or comparable homes to see if the asking price for a foreclosed home is, in fact, a bargain.
•Factor in the costs of cleanup or repairs if the home isn't in good condition.
Founded in 1912, BBB is an unbiased non-profit organization that sets and upholds high standards for fair and honest business behavior. BBB offers objective advice and a wide range of education on topics affecting marketplace trust. BBB also offers complaint and dispute resolution support for consumers and businesses. Today, 128 BBBs serve communities across the U.S. and Canada, evaluating and monitoring more than three million local and national businesses and charities. For more advice on finding companies and businesses, start your search with trust at http://www.bbb.org
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