Did you know that you can buy abandoned property for a great price, without having to worry that it’s a total wreck of a house? According to a recent article in the Washington Post, “Sturdy and even stately homes are available in Detroit for as little as a few thousand dollars.” But you don’t have to live in Detroit to take advantage of abandoned real estate.
Buying abandoned property takes a little more legwork than buying “normal” real estate. Buy when you buy abandoned property, you can find a great home or other property at an unbelievable price.
But how do you get started? And what do you do once you find a likely property? Whether you choose to go it alone or enlist the aid of a real estate agent, buying an abandoned home or other property can be a profitable and rewarding experience. The following is a short “best practices” list to help you buy abandoned property.
1. How to Find Abandoned Real Estate
There are a couple of different ways to go about this. The most obvious is simply to drive around and see which house look potentially abandoned.
How can you tell? Weeds on the lawn, or even in the cracks of the driveway, are one sign. Piled up newspapers or mail (keeping in mind that it’s a crime to remove mail from a mail box), lack of motor vehicles, built up rust or leaves, and obvious disrepair are good signs that a house has been abandoned.
Did you know that you can also find abandoned property on the internet? That’s because some properties are more abandoned than others.
A home abandoned by its owners is different from a home abandoned by renters or a leasing business. The owner may be too busy, or otherwise doesn’t want to deal with the property after its last renters abandoned it. Or they may simply have no use for it for other reasons.
Finally, many abandoned properties are in the hands of banks or other lenders. Many of these lenders may only have to recoup part of the originally loan, and may sell abandoned real estate for less than market value.
How can you find these properties? They are often listed on real estate websites with phrases such as “below market value,” “must sell,” and “immediate possession,” and “under appraisal.” You can also Google these terms, or look at other places such as ForSaleByOwner.com.
Finally, you may be able to buy abandoned property at auctions, such as law enforcement seizure auctions or local tax auctions.
2a. How to Find an Abandoned Property’s Owner on Your Own
The most direct route to finding an abandoned property’s owner is to simply visit your city hall or county government office. Local tax departments and probate court records are the best place to begin your search. Most local government tax records will show you who last paid taxes on the property, or at least who was billed. The people in  your local city hall may be able to recommend other information sources as well.
There are other options available if you still can’t find the property’s last owner. Depending on the neighborhood, you may be able to find out more information from the owners. You may also want to Google the house’s address and see if any relevant information pops up (news pieces, announcements, and other relevant info).
(Keep in mind that while it may be tempting to look inside the property’s mailbox, it is a federal offense to take mail out of it!)
Once you’ve found the owner, it’s usually safe to contact them via a letter expressing interest in their property.
2b. Use a Real Estate Agent to Find and Buy Abandoned Property
As you can see, it really helps to have a real estate agent, even when you want to buy an unlisted property! Your agent will only become more necessary as the buying process moves forward.
If the property you’re interested in was found on one of the sites above, a real estate agent should be able to easily get in touch with the seller. From there, they can make an appointment for you to inspect the property, etc.
If you don’t know who owns the property, a real estate agent might be able to help. They can look up on the MLS (Multiple Listing Service) if the home was recently up for sale. They may be able to tell you the asking price as well.
If not, having an agent can still save you trouble over finding the owner yourself. Agencies and agents usually have a wide network of industry contacts, industry service providers (electricians, contractors, etc.), and happy former clients. They can often put out feelers for you that can save you the time it takes to research, and the hassle it often takes to deal with the owner.
3 How to Negotiate the Price of an Abandoned Property
This can be a touchy part of the process if you don’t yet have a real estate agent. If you have negotiation experience, and are good at it, you may get by on your own. But if you’re uncertain at all, it’s time to contact an agent!
At the very least, you’ll need an attorney to look over any sales contracts and other paperwork, should negotiations get that far.
The upside of buying an abandoned property is that you can typically buy it at below market value–often well below. You’ll want to look over the home yourself, and then have someone inspect the home, to see what needs to be fixed. Chances are, something does.
This needed work will work to your advantage when it comes to coming up with an offer or negotiating a price. If the property is under lien, or if taxes are owned on it, you can work this into your negotiations as well.
2 Point Highlight
“When you buy abandoned property, you can find a great home or other property at an unbelievable price.”
“The upside of buying an abandoned property is that you can typically buy it at below market value–often well below.”
