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Buying Foreclosed Properties: Know the Risks

Do you want to find your absolute best deal in San Diego foreclosure real estate? San Diego foreclosures and REO's are the best way to go. But, before you start looking, know that when buying  foreclosures you are buying something much different than if you purchased the same property from a typical seller. As your San Diego foreclosure real estate agents, we take pride in helping you invest in San Diego foreclosures and REO's while answering all of your questions about foreclosures and REO's.

Read Also:  California Consumer Rights when purchasing a home

When purchasing a property from a typical seller, even if the property is sold "as is", you usually have some protection. The seller has owned or occupied the property for some time and they know some of its history. Even if no Seller's Property Disclosure is offered,  state laws usually dictates that should the seller be aware of a significant problem that they disclose the problem to the buyer.

With the sale of foreclosures from lenders, the same laws usually apply. The difference is that the lender usually knows absolutely nothing about the property other than what is contained within the appraisal report from when they first made the loan. They have never occupied the property and may even never have actually seen the property, and they are not required to reveal what they don't know (or should have known).

Read Also: Buying Foreclosures and REO's In As Is Condition: San Diego Foreclosures and REO's

Assume a typical seller does not provide a disclosure form and immediately after purchasing the property you find that the septic tank was backing up. If you check with the neighbors and confirm that this was a problem which existed prior to the sale you may have recourse against the seller, since the seller knew or should have known about the problem and did not disclose it to you. With a foreclosure, you will usually have no such recourse against the lender.

The same condition exists with almost every aspect of the home including the mechanical (heating/air) system, electrical system, plumbing system, and any other physical aspect of the property.