Buying an abandoned house can inspire hope and possibility. You might imagine what it would look like once revived, seeing an empty place with boarded-up windows. With the right approach, that vision can become a reality, but it requires careful planning and a willingness to tackle unexpected issues along the way.
Before getting started, it's helpful to gather as much information as possible about the property and its obligations. While an abandoned house may look like a bargain at first glance, there are many details to confirm, including ownership, legal standing, and potential repair expenses.
To help you make an informed decision, we have created a step-by-step overview of the typical process for buying a vacant house.
How To Buy An Abandoned House
1. Identify Potential Properties
Your first move is to look for places that appear to be unoccupied. Observing boarded-up windows, yards filled with debris, or signs of neglect can help you spot potential targets. Local real estate websites, city records, and community groups can also provide leads.
When you find a house, add it to a shortlist of addresses so you can investigate further later.
2. Determine the Owner
Once you have a shortlist, try to determine who holds the title. You can do this by searching the county or city records. Sometimes, the owner still exists, while other times, a bank or government body may have taken back the property. This information is crucial since you can't move forward without knowing who can legally sell the home.
Check public records at the county clerk's or assessor's office to see who's listed on the deed. If the property is bank-owned, you might need to contact the bank or mortgage servicer.
3. Verify Abandonment and Check Legal Status
After identifying the owner, confirm that the property is genuinely abandoned instead of vacant. A neighbor might have valuable insights. The local government might also have records indicating how long the house has stood empty.
In addition, make sure there are no current lawsuits, probate issues, or other legal concerns that could prevent a sale.
4. Contact the Owner or Lienholder
If the county records show a private individual or representative, you can contact them directly. For bank-owned places, you'll need to contact the bank or other financial institution. Express your interest in writing or by phone, then follow any instructions they provide regarding a potential purchase.
Please note that if a government entity owns the property, you may need to go through a formal auction or bidding process.
5. Hire an Inspector and Assess Renovation Costs
Always bring in a professional inspector to evaluate structural integrity, plumbing, electrical systems, and other vital components. This step helps you estimate how much work you'll need to do once you take ownership. Factor these costs into your decision so you can make a realistic plan that fits your budget.
6. Make an Offer
If the inspection results are acceptable and you're ready to proceed, submit a written offer. Base your offer on the home's potential value after repairs minus estimated renovation costs. Negotiate with the owner or lienholder, making sure the deal covers any unpaid taxes or liens.
Also, make sure you've included any relevant details, such as who pays for closing or what happens if the inspection reveals major problems. Be prepared for negotiations, as the owner or bank might seek a different price from your initial proposal.
7. Close on the Home
If your offer is accepted, you'll move to closing. You'll finalize the paperwork and transfer funds according to an agreed-upon timeline. Upon signing, you become the official owner and can begin whatever repairs or renovations you have planned.
If you need financing, lenders may require additional inspections or specific loan programs for abandoned or distressed properties.
