Despite an obvious need for a bush hog, 61k for 2.7 acres with a pond at the back sounded ideal. Central air or at least the duct work was already present in the home. Two full sized bathrooms with the possibility for a half bath upstairs had us imagining furniture placement. We saw this house on the same day as Jonestown. Yeah.
The house is being sold by a company called Econohomes which sells homes under duress due to tax liens and other encumbrances. For more on tax liens go here. I found this site pretty informative. Essentially whoever owns this home has not paid their taxes in a while so the government took it away. In order for us to attain the home, we would have to pay said taxes and then hope and pray we can get title insurance. This was a bit messy for us but many folks are successful with their home purchases. According to one of the wisest men on the planet, Ed Castle (aka my grandfather), the most important part of buying a home with existent encumbrances is to get a really good real estate lawyer to cover your own.... well you know. Also, until those liens are paid, you don't get your title/deed. So the government could just come and take what is now your house at any time. Not cool bro.
Andy and I discussed this process and decided that it wasn't for us. It is much too difficult because of how far we currently live from the area.
If you would like to purchase a home with a title lien here's a few things you should have on hand:
-a trustworthy real estate lawyer- CYA people! If you're planning on staying in the Surry County area, a few of the local lawyers would do just fine and are rather inexpensive. I personally would head over to Williamsburg and find someone there. Preferences.
-a decent amount of cash. Econohomes expects 10% down payment to reserve the home and if you finance through them. 1k down if you get other financing. Plus you will want to cover the tax liens asap.
- a talented and detailed home inspector. Most of these homes have been sitting a while even before Econohomes got them. You want to make sure that something isn't going to surprise you a year from closing. Despite the cost, no one likes to drop 10 grand on a new roof without a bit of warning.
- a trustworthy contractor or your own (legit-- not delusional) handy man skills. Most of these homes are in varying states of disrepair and unless you are driven enough to get a 203k loan, you'll need some minor abilities. In every home we have looked at there has been a need to replace carpet, redo kitchen cabinets, minor (or major) electrical work, plumbing... you name it. You're getting a cheap house for a reason.
- Calculator: Is the cost of repairs/ taxes/ lawyers etc going to cost you more than buying a home in better shape with no tax liens? Most of the time, unless you have the aforementioned cash on hand and handyman skills... yes. Yes it will. No one likes to watch their "investment" turn into a fiery money tornado destroying their checkbook... and believe me.. if you're not careful it will.
and last but certainly not least- curiosity- Educate yourself! As as many questions as you can. I cannot stress this enough. The real estate lawyer can help but only you can know your limitations. Why is this house so cheap? Find out. Location. Schools. Neighborhood. Crime rates. Structural. All of these things in one way or another effect your appraisal when trying to sell again later. You can walk away. Let someone else with more patience or less preparedness get sucked into that mess. You don't need it.
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