How agressive should one get in doing an inspection of the property? It is important to know if the property is vacant/owner/tenant occupied. And the more one knows about the interior and exterior condition the better. I understand these are part of the risks of buying at auction, but the more one knows about the property, the less risk they are taking. And the amount of risk you are taking on ultimately affects the size of the bid you are willing to make.
Does anyone just go up and knock on the door to see if it is occupied? If so, what do you say? Offer money for inspection? I would be concerned that I would encounter a hostile homeowner.
For vacant homes, I have heard of investors going so far as crawling in the windows to get a look at the inside.
Anyone have a good process for inspection other than a safe and quick drive-by?
I’ve definitely gone to a number of vacant homes in the days before the auction and found doors kicked in, presumably by other investors looking to get a leg up at the auctions. There is no doubt that you can tighten your bid with better knowledge of condition. Just remember that even if vacant the property is still owned by someone and you are illegally trespassing. At the end of the day it really comes down to your risk tolerance… and this one really is a trade off. Risk not knowing the condition and either losing a deal or getting stuck with costly repairs, or risk your personal safety or even being jailed for entering a house illegally. I would not listen to anyone who offers hard and fast rules… instead go with your gut on a case-by-case basis.
At the N.A.R. convention one or our customers, a Realtor, who has recently purchased 3 houses at auction, said that he had quite a bit of luck going to the door and simply saying he was interested in the house and asking if he could take a look. It doesn’t surprise me that he has had some success. In years past only folks in serious distress were in foreclosure, as everyone had equity. These days a lot of nice, honest, hard working folks are upside down and in foreclosure, making it a bit less threatening to door knock than in the past.
Outside of title problems, not being able to see the inside of a property is high up on the risk list! Here’s some ideas:
One thing I do with good success is use a real estate contact who will look up a property as a past listing and provide me with the past description/pictures of the property and what it sold for in the past.
Go the the county tax assessor’s office and find out what description they have on the property such as number of bathrooms, square footage, etc.
I have seen an occasional obviously vacant property with a door unlocked, but I am nervous every time I open it and enter. (I plead guilty to once crawling in a medium size doggy door at a vacant house in order to take a look inside !)
Go up to the door, ring the door bell and when someone comes to the door be friendly and say “I understand your house is up for sale and I was wondering if you folks had any interest in renting at a very reasonable rate if a sale takes place”? I have PLANNED on saying this when walking up to a dozen doors over the past few months but never have since no one answered my knock!! I think it could work since the people may not want to get kicked out and would be willing to talk about the rent option while letting you look around inside. This would not be deceptive since I am open to the idea of giving the occupants some rent time after buying a property. If they are unfriendly, you have found out someone lives there, maybe got a peak thru the front door. If nobody answers the door, you feel more free to walk around and peak in some windows. What do you think??
How current are the foreclosure radar aerial photos? How can you risk mitigate buying propertes by photos only? This would allow us to pursue so many more properties. Jeff
Don’t do it. Couple of issues. 1. Conditions could have changed since the image was taken, even if the image was only take a month ago. I’ve been fortunate but have heard too many fire stories from fellow investors to chance it. 2. The dots we put on the maps are based on publics record data, and mistake happen. Could really suck if you found out you actually bought the house across the street. Our goal is to give you tools to narrow the number of properties you have to inspect and research, saving you time and money… but we’d never recommend you purchase based solely on the info we provide without doing further inspections / due diligence.