Can You Buy Abandoned Properties?
Yes, you can buy abandoned properties just like any other home. However, it may be more complicated. It may not be obvious who the owner is, and even once you locate them, they may or may not be willing to sell. The home may also have other problems like structural issues or liens on the title. But if you're willing to put in the extra work, buying abandoned properties can make great investments.
How to Find Abandoned Properties
- Drive Around your Neighborhood or City
- Look at Online Listings
- Go to a Property Auction or check REO Listings
- Work with a Real Estate Agent
- Contact the County Tax Assessor
1. Drive Around your Neighborhood or City
The best way to find abandoned properties in your area is to drive around and look for homes with deferred maintenance. You may find a few in your neighborhood, or you can widen your search to other parts of your town or city. Look for signs that the owner isn't home, such as overgrown lawns, broken or boarded-up windows, no lights on in the home, or lack of cars in the driveway. If you feel brave enough, you can even knock on the door and see if anyone answers, although proceed with caution.
2. Look at Online Listings
Another great way to find abandoned properties near you is to check online listings. Look for any listings that say short sale or bank-owned. That means the home is in foreclosure or has already been repossessed by the bank. You may have to dig a bit deeper than looking at the standard listing sites, but this method allows you to find abandoned properties without even leaving your home.
3. Go to a Property Auction or check REO Listings
Abandoned properties that have gone into foreclosure will eventually be repossessed by the bank and auctioned off to the highest bidder. So, you can often pick up a great deal by going down to the local courthouse to bid on properties. However, make sure you have the liquid cash ready because you'll be expected to close quickly. Any properties that don't sell at auction will be kept on the bank's balance sheet until someone offers to buy them, which are known as REO properties. Most banks have an online directory of REO properties you can access, or you can always try calling them or visiting a local branch.
4. Work with a Real Estate Agent
You can also find abandoned houses by working with a real estate agent. They can access the MLS to look for short sales and other abandoned homes that may not be available on other public listing sites. They can also help you search public records databases, reach out to banks about their REO listings, and advise you on other methods you may not know about. An agent will want a commission out of it, but they can also provide a wealth of information and guidance that may be well worth the cost.
5. Contact the County Tax Assessor
You can also find abandoned homes by contacting the County Tax Assessor to ask for a list of houses in the area with unpaid taxes. This is often a sign that the property is abandoned, although you should reach out to the owner to confirm.
How to Purchase an Abandoned Property
- Do a Search for Abandoned Properties
- Find Out if the House is Truly Abandoned
- Track Down the Owner of the Building
- Make an Offer
- Close on the Sale
1. Do a Search for Abandoned Properties
Unless there is a specific property you're interested in, it often helps to start with a wide search and narrow it down until you've found the perfect home. Not all abandoned properties are for sale, and it may be challenging to track down the owner. So, use one or a combination of the methods listed above to do a broad search, then narrow it down until you find the perfect home.
2. Find Out if the House is Truly Abandoned
Before you go through the trouble of submitting an offer, make sure the home is truly abandoned. Even if a property looks rundown or is in foreclosure, it does not mean it's unoccupied. The owner may still be living on the premises but doesn't have the money to fix it up or pay the mortgage. It's also possible that there could be a squatter on the property, which may make the purchase more complicated. So, do some research and consider checking it out in person to confirm the property is fully abandoned.
3. Track Down the Owner of the Building
Next, you'll want to track down the owner. Their contact information should be available in public records. However, sometimes, this information can be incorrect or out of date. If the property has gone into foreclosure, you can contact the bank directly about making a purchase. When all else fails, you can go down to the home and knock on the door or leave a letter on the doorstep or in the mailbox in case they stop by. You could also search the property on Google and see if you can find the number of a real estate agent or information about the owner.
4. Make an Offer
Once you locate the owner of the property, it's time to make an offer. But you'll want to do some research first to determine a fair price and understand your own commitments. If the home has any unpaid liens or serious deferred maintenance, it will be your responsibility, so factor that into your offer. Those details can also be a good bargaining tool, as many owners will be willing to sell if they are already underwater and you're offering an easy way out. However, before you make an offer, it's wise to make sure you have liquid cash available. Owners will often accept a lower offer if you're willing to move quickly, but they may disappear or get cold feet if you need to wait for mortgage approval.
5. Close on the Sale
Once you and the owner agree on an offer, all that's left to do is close on the sale. Depending on how you found the property, you may not have the ability to have an inspection and appraisal beforehand, especially if you bought it at auction or from a bank. So, understand the risks of purchasing an abandoned property before you make an offer. But otherwise, the closing process will be the same as purchasing any other home.
Buying Abandoned Properties Bottom Line
Buying abandoned properties can be a great way to acquire a discounted investment property or a home you plan to renovate. However, the process can get complicated, and there are additional risks you must consider. But for those who are willing to put in the legwork, buying abandoned homes can be a goldmine of opportunity.