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Foreclosures and auctions may offer an affordable way to buy a home. However, the cost of acquiring that home may spiral out of control if you do not perform your due diligence before you purchase that home. This article discusses some issues that your conveyancing professional should look into before you close the deal.
Is the Home Vacant?
Sometimes, a home may be put up for sale at an auction when the previous owner or tenant is still occupying it. That scenario may delay how soon you can gain access to that home because different jurisdictions have their own regulations governing how former owners or existing tenants can be evicted from a foreclosed or auctioned home. It is therefore very important for you to look into the current occupancy status of the foreclosed home before you buy it at an auction so that you avoid the added cost and time of getting an eviction order and bailiffs from a court of law.
Are There Unpaid Dues?
Another thing that your conveyancer should look into before you buy that home is the presence of unpaid dues, such as property taxes and service charges. This due diligence is very important because it may be hard for you to be absolved from paying those charges once the property is transferred to your name when those obligations have not yet been settled.
When Will the Property Be Regarded as Yours?
You should also inquire about the provisions stipulating when the property will be regarded as yours. The laws of your jurisdiction may have sections dealing with this matter. Alternatively, the purchase agreement may have clauses that clarify when ownership can be deemed to have been transferred to you. This information is important because it shows at what point you will become liable for anything that happens on your property, such as a tree branch damaging the roof of the neighbour's house. For instance, you may be regarded as the owner of the property as soon as you are declared the buyer of the property upon the fall of the auctioneer's hammer. It will therefore be incumbent upon you to get appropriate insurance cover so that you are shielded from the financial impact of any liability.
As you can see from the discussion above, you need to avoid buying a home at an auction if you have not done your homework about all the aspects that may affect you once you buy that home. Seek for advice from a conveyancing professional so that you limit the pitfalls that you may be exposed to when you buy a home at an auction or foreclosure.