The process of buying an abandoned house is much different than buying a new home, as it involves finding the right property, ensuring it’s abandoned, and getting in touch with the right people to determine the next steps. As long as you do your research to understand local and state foreclosure laws and are prepared to make the necessary renovations, buying an abandoned house can be a lucrative investment opportunity.
Here’s everything you need to know about buying an abandoned property.
An abandoned property is a house or building vacated by its original owners and left unoccupied for a certain length of time. The actual amount of time a home needs to be vacant to be considered abandoned depends on your state laws, but most abandoned properties are forfeited by the homeowners due to foreclosure or other financial or legal circumstances.
Unlike a vacant property, an abandoned property is no longer under the control of its original owners and usually needs renovations due to neglect. A vacant property is a home that’s not currently in use by its original owners, as it’s a secondary residence or investment property, but it’s still under their legal ownership.
The first step in buying an abandoned house is locating one that's available for purchase. This can be challenging, as abandoned properties are not always actively listed online.
There are several strategies to find an abandoned property to purchase, including:
Once you've identified an abandoned property of interest, the next step is to try and find the rightful owner of the property. You can usually find the owner’s information through the public records at the local county assessor’s office. The property may be bank-owned due to foreclosure. If so, contact the bank directly to determine if it’s available or scheduled to be put up in an upcoming tax auction. In some cases, you may need to hire a title company or enlist the help of your local government to locate the property owner.
Before making an offer, it's crucial to have the property thoroughly inspected by a professional to assess its condition and identify any potential issues. Abandoned houses can have structural issues, mold, pest infestations, or other problems that can be costly to repair. A professional home inspection will help you understand the property's condition, estimate renovation costs, and aid in your decision to purchase it. To schedule a home inspection, you’ll likely need to contact the bank or agency legally holding the property.
Once you decide whether the abandoned home is worth it, you’ll need to make an offer to the owner. If the house is bank-owned or in foreclosure, get ready to bid at the tax auction. The offer should consider the property's current condition, estimated repair costs, and potential value after renovation. If you’re bidding at a tax auction, you may have to register with your local tax commissioner’s office to receive a bid number and entrance at the auction.
Once your offer is accepted, you'll enter the closing process. This involves finalizing the purchase agreement, securing financing, completing all the necessary paperwork, and paying the closing costs. For abandoned properties, this step may be more complex than a typical home purchase as you may need to clear any liens, settle outstanding taxes, or resolve other legal issues before taking ownership. If you’re purchasing the home through the original owner, working with a real estate attorney can be particularly helpful during this stage to ensure all legal requirements are met and the property transfer is valid.
If you’re closing on a bid at auction, you’ll need your financing secured beforehand, so you can pay for your home purchase once the auction closes. In this case, you won’t have to worry about any liens, a title search, or outstanding taxes, as the bank will have this information in order before the auction.
Go to Zillow, enter your search area, and click 'Listing Type.' Then select 'Foreclosures' in the 'For Sale' section to view what's available now. For what may become available in the future, select 'Foreclosed' or 'Pre-Foreclosure' in the 'Potential Listings' section.
Remember that each abandoned property is unique, and the buying process will likely vary depending on the specific circumstances. Ready to begin your home-buying journey? See what you pre-qualify for with us at Zillow Home Loans*.
*An equal housing lender. NMLS #10287
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