Take The Risk Out Of Buying A Lien Home

Buying a Lien home can be a great way to begin a real estate investing career or to purchase a home that you are going to live in.  Regardless of why you are considering buying a lien home, there are some things you should know before diving in. 

While buying a lien home can be quite profitable, it can also be complicated and risky.  Buying a lien home can be complicated because of all of the steps that need to be taken to ensure that you won’t be actually losing money on the deal.  Buying a lien home can be risky because if you miss a step you could actually end up losing your investment.

Steps in buying a lien home

•    Title search
o    Conducting a title search prior to buying a lien home is essential because there may be more money owed on the home than just the lien you are paying off.  There could be other liens on the home that will need to be satisfied or more than one mortgage on the home that you need to be aware of.

•    Occupancy search
o    Do your homework on the occupants of the home.  How long have they been in the home?  Have they built up some equity in the home?  Have they filed for bankruptcy protection?  Have they been responsible homeowners in the past who have just fallen into financial trouble?  You should be aware of these things before buying a lien home because they could be an indication of other expenses that may arise in the future.

•    Property inspection
o    Make sure to do everything you can to inspect the property before buying a lien home.  Often it is not possible to get into the home for a proper inspection.  In this case you could check with the county auditor for permits for home improvements applied for by a home improvement contractor.  Contact that contractor and tell them that you are considering buying a lien home that they have done work on.  Ask questions about the home.  They should be willing to give you the scoop, especially if they are under the impression that they could get more work.

If you take these steps before buying a lien home, you could remove much of the risk involved in the transaction.  Buying a lien home can be risky, but buying smart can be very profitable for you, too.
 

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