So you’re looking for a house in Salem. You’ve probably heard that there are much cheaper ways to buy a home than having your realtor show you all the homes on the MLS that have been polished to a mirror shine. You’re right, obviously, and now you’re looking at foreclosed homes in Salem, OR. Great, welcome to my world. If I may, I’d like to help you along!
There are some things you should really know before putting your money down. Once you find a house that works for you, you’ll need to be careful that you address some of the issues that are likely to come along with a foreclosed home.
The first is who you’re buying from. Even for a complete foreclosure, a substantial fraction of the foreclosures in Oregon will leave what’s called a right of redemption on the property for several months. The holder of a right of redemption can force you to sell the property to them at a fixed price! The borrower who had their home foreclosed will typically have this, but they may have sold it, if you’re going to buy a property with a right of redemption still on it, make sure you end up holding the right of redemption too. With any property you buy, you’ll need to do a title search to determine the validity of the seller’s ownership and whether the property has any legal issues with it, but this is especially important for foreclosures because of the right of redemption and…
Because of liens. What’s that you say? Liens? Yes, most people don’t just arbitrarily decide not to pay their mortgage. Usually they’re struggling financially and having difficulty paying a number of their bills. A creditor’s favorite thing to do with an unpaid bill is attach it to some real estate that they know the debtor owns. That’s because real estate is such a good store of value and the creditor knows that if the owner ever wants to get at that value through a sale or refinance, they’ll need to pay off the lien. A creditor could be a homeowner’s association, a contractor, a government entity, or anyone else. Not all liens are wiped out by a foreclosure sale, so be sure you look!
Third, budget for uncertainty. In many cases, you won’t be able to inspect the inside of the home. Even if the outside of the house looks great, you want to have some money set aside to deal with something seriously wrong in there, like a busted furnace, faulty wiring, or leaky windows. You can’t see it, but it’s probably there.
Those are a few of the big things to make sure you take care of when looking for foreclosed homes. Of course, you’ll want to do all the due diligence you legally can, and there’s loads of stuff to review before the purchase of any piece of valuable property but you’re on the right track. Buying real assets at a discount is the world’s most popular way to wealth for a reason! I’m sure you’ll do great!
If you’re unsure you’re ready to do all that, don’t let it stop you. We buy foreclosed houses in Salem, solve the above problems, and package the properties up for investors like yourself at a discount, so Call 503-376-6060 to hear about our current inventory. Keep looking for deals, my friend, and share you thoughts in the comments below.