Sunday, March 13, 2016

The real truth about buying a foreclosed house

As we inch closer to our 2 year Anniversary of owning our home, I wanted to share some things we have learned from buying our first house.  I never thought I would buy a house that was in the process of being refinished, but that's what happened.  Be sure to check out my post here for more information and a back story on finding our house.


First, we didn't buy our house directly from a bank.  The house was foreclosed and sat vacant for a while.  I can't remember exactly how long but I think it was about a year.  The windows were all broken and boarded up and there were critters coming in and out for a while.  It was purchased by a realty group that bought foreclosures and fixed them up. They purchased the house in December and we first saw the house the first week of February.  Before we saw the house, they had removed some walls and made some changes to the layout. We had a verbal agreement to purchase the house and a couple days later we had signed an offer for the house.  I could go into a lot more of what happened after that but I will try to condense what I say.  The house was supposed to be a "quick flip" and only take 4 weeks to complete.  But, with having a record breaking amount of snow that winter, on top of the company working on various other projects, the house was not completed for almost 3 months.

So, lets move on to some important tips I have to give you if you ever get into a situation such as this.

The kitchen and dining room on day 1

1. Get everything in writing!  Every.little.thing.  With our flip, we had several items that needed to be fixed, including a broken window in the garage basement.  We corresponded via email mostly, unless we were meeting in person and one or two phone calls. While we had some things written down, there were some items that we thought would be done without us asking.  This was not the case.  Plus, I think in the end we felt like they really got careless in some of their work because we had already agreed to purchase the house.  So beyond the broken window, which we ended up having to get replaced ourselves after going back and forth with the company many times, we also had to work really hard to get them to give our hardwood floors another sand down, even though they said right from the start that they would be done one last time.  (it was so rough I was afraid to walk around in bare feet)


2. Did they pull permits???  Like I said earlier, some walls were removed in our house before we agreed to purchase it.  Depending on what your city permits require, ask to see the permits.  If they are a responsible company, they will have gotten these and you will be able to have that documentation if it is ever needed.


3. Inspections.  We had a home inspection done when most of the work was finished and apart from a couple of non-GFI outlets in the kitchen and a couple other minor things, everything appeared fine.  Unfortunately, recently we learned that not everything was completed properly.  The only outlet in our main floor bathroom was not rated for use in damp areas.  The ground wire was not secured enough and it cause arching.  We had an electrician come and replace it and found that the outlet was melted from the heat of the arching.  That was scary and could have been much worse damage.  We also realized that the outlet for our microwave was not properly installed.  It was basically pushed into the back of the cabinet so you couldn't tell that it was not installed in a box and not attached to the wall.  Thankfully it was a fairly easy fix.  So, be sure to get that inspection, or if you can afford it, get one from more than one place.

Another point on that is to check things yourself.  We had doors that didn't latch or even fully shut, that we didn't realize until after the work crews were done.

I think that's supposed to be attached to something!

4. Expect to fix things.  We knew there were things that the flipping company were not going to fix and they were not included in the purchase agreement.  Just be prepared to make the changes that you want.  For us, the first big purchase was replacing our front and side doors.  You can read all about those here and here.  We will be working next on our bathroom to fix the floors where the grout is coming out as well as replace some water damaged wood on paneling and repaint with better paint.  You can read more about that, and see some of our problem areas here.

New Door!
5. Listen to the stories!  On our first big move in day our new next door neighbor stopped by with baked goods!  She introduced herself and right away said how happy she was to see a "nice looking couple" moving in.  Her experience with the previous owners was horrible!  From being harassed and yelled at, to her and her roommate acquiring restraining orders against the homeowners, they had been through so much.  Not to mention the house was known for being a drug house. Our neighbors have all shared stories with us and we appreciate hearing them.  They are the ones that had to live through, not only what the previous owners did with the house but also having to live next to a foreclosed house.

Well, if you have stayed with me this far than, thank you.  If our experience can help someone else who may be going through this situation then I'm glad.  There are still plenty of times where we question if we did the right thing in purchasing our home but, we love our house and we see the potential it still has.  I know I've said it before, but I want to give this home the love and warmth that was taken away from it during it's "dark years".  And I think we are accomplishing that.

Have you had your own experiences with buying a foreclosed home?  Or just have some stories from your own home-buying experience?  I'd love to hear about them!  Any tips I should add?  What would you have done differently?

Be sure to check me out at the following as I'm sharing lots of great stuff here as well!


 
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