Abandoned property for sale? Buying one can be a bargain for homebuyers. But where can you find them?
“Abandoned house for sale” isn’t a sign you’re likely to see on the roadside (is this method of sale even legal, you might ask?). But abandoned properties that are unclaimed by their owners are potential low-cost purchases that may actually be attractive to prospective home buyers.
An abandoned property is usually a property whose original owner is no longer in possession of the home. Due to the owner’s financial difficulties, the house is run-down and in need of repair. If the law in your area allows you to claim this type of home, it might be worth investigating.
However, some abandoned homes for sale turn out to be in good condition, and the owner may want to unload the property before foreclosure. This could provide the right buyer with an opportunity to purchase the abandoned property or unclaimed home at a discount—and possibly a significant return on investment if you later flip it.
How to buy an abandoned property for sale near you
Purchasing an abandoned or unclaimed property involves following the same procedures as buying any other piece of real estate. Before setting out on your journey to find an abandoned home, review your financial situation.
Remember, there will be additional expenses over and above the original sale price of the property. A pre-qualification from your bank or lender will help you estimate what mortgage amount you qualify for. Many banks also require pre-approval letters, so you can make quick decisions on the property you wish to purchase.
How to find an abandoned property for sale
Most abandoned homes for sale are on their way to foreclosure, but the bank has not yet initiated the process. Various lists of abandoned properties or unclaimed properties are available.
Check for listings of homes for sale with certain phrases that may indicate an abandoned property, such as “immediate possession,” “must sell,” “below market value,” or “under appraisal.”
Real estate agents will usually have valuable knowledge of abandoned properties in the area and the law relating to claiming them, and can provide you with a selection of homes about to be foreclosed on by the bank.
Some properties may look abandoned, but are not listed for sale. You might also check into the laws regarding unclaimed property and whether there is a statute of limitations on its return.
If you find an interesting unclaimed property like this, visit your county clerk’s office. It will have information about the homeowners, the home’s current appraised value, liens, or tax problems.
You could then try tracking down the owners and asking them to sell their property. If the property has had liens or tax problems, the owners might be more willing to sell.
Risks involved with buying abandoned property
Abandoned homes will almost always have issues. Due to months (or years) of neglect, a lack of maintenance, and overall aging, vacant homes are far from pristine.
One major risk? Abandoned homes usually have had their utilities turned off. With no way to check the water, electricity, gas, heating and cooling systems, or appliances, even a professional home inspector will be unable to thoroughly evaluate the house. There could be wiring problems, water leaks, or gas leaks—any of which would be extremely costly to repair.
It might be possible to have utilities turned on temporarily, but that requires paying a deposit and putting the utilities in your name. Even if utilities are turned on, you’ll likely have to accept some elements of the abandoned home as-is. But remember, forgoing major system inspections is a huge gamble.
A second major risk factor is the deferred maintanence involved with the purchase of a property that’s been left to the elements. If previous owners abandoned the home or lost it to foreclosure, they probably didn’t pay superb attention to routine maintenance tasks. Costly repairs will crop up sooner than expected. And you’ll have to budget for future repairs.
And to top it off, obtaining home insurance on an abandoned home is difficult. Most insurance agencies won’t insure a vacated house without an inspection from one of their agents. And that agent might require you to make costly repairs before issuing a policy.
If the insurer issues a policy, premiums for an unoccupied structure will likely be significantly higher. Because no one has watched over the home, it’s more likely to have suffered vandalism or fire damage. Vacant homes often have broken pipes or leaking roofs with resulting water damage, stolen copper wiring, mold, pest issues, and damaged appliances.
Placing a bid on an abandoned property for sale with no owner
Assuming you have found a potential abandoned property for sale and been pre-approved, you will want to factor in those costs that will be needed to get the home into solid condition. Get a thorough maintenance inspection performed on the property, and note what needs to be fixed and how much it will cost.
Claiming a property like this also involves adding in the cost of the appraisal fee, pest and lead inspection fees, title insurance, closing costs, and other legal fees.
Crunch the numbers before you consider a bid. A real estate agent can also accompany you to the abandoned property for sale and point out the extra expenses you will incur after the purchase of this property. The agent can also help you figure out how high your bid should be. Look for the right opportunities, and you may find a home that is just right for your budget.
