How to Purchase an Unclaimed Property

How to Purchase an Unclaimed Property

For the right buyer, an unclaimed property can be an enticing deal too good to pass up, potentially offering low costs and a chance to permanently fix up a structure of their own.

But while purchasing an unclaimed or deserted property can be a great deal, it can also be a tricky and time-intensive process.

Here are a few suggestions for how to go about purchasing an unclaimed property:

Find the Property – And Make Sure It’s Really Unclaimed

Short of driving around and laying claim to a seemingly run-down plot, how can you find unclaimed properties? There are various lists and databases of “vacant and abandoned” buildings available for searching online, and many experienced real estate agents will know about the many different properties available in their area, including recent foreclosures or unclaimed properties.  

Besides that, real estate classifieds and listings may include some language clues that indicate a building is currently unclaimed; look for words like “immediate possession,” “must sell,” or “below market value.”

If you do spy a seemingly-unclaimed home that you fall in love with – but that isn’t listed for sale – it’s important to do your research. Seek out the owners by consulting with your county clerk’s office, where you should be able to find information about the homeowners, the value of the home, and any liens or tax problems associated with the property.

If there are liens or taxes owed, or if the structure requires major repairs, the owners – once you’ve tracked them down – may be highly motivated to sell, letting you and your real estate team pursue the property as you might a short sale or other high pressure situation where the purchase benefits both buyer and seller.

Avoid “Adverse Possession” Situations

One of the reasons those of us in real estate don’t like using the phrase “abandoned property” is because, strictly speaking, real estate can never truly be abandoned. Whether it’s an individual, a company, the government, or a bank, some name will always be associated with the deed to the property, even if the owner does not live on it or has decided that giving it up is easier than attempting a sale.

With that said, if a piece of property truly seems deserted, there is nothing to stop someone from simply moving onto the estate and squatting. After a period – from anywhere between five to 25 years – the title of the property may revert to that inhabitant, given that a set of common law requirements are met. This is known as “adverse possession.”

Of course, this is an incredibly risky – and unethical – track to take. Regardless of the condition of the property, the true owner of the property – or a bank or brokerage representing them – can lay claim to it any moment, which leaves you exposed and at risk of incurring a charge for trespassing.

With all of that considered, we maintain that adverse possession is never a wise strategy toward property ownership.

Plan and Place Your Bid

If you’re able to track down the legal owners or otherwise confirm the unclaimed status of the property, you can move forward. As with any real estate situation, it’s extremely important to make sure that your financial affairs are in order; this is particularly important when it comes to unclaimed property, which will usually require additional costs for appraisal, various inspections, renovations, and, often, legal fees.

Because time is often of the essence when it comes to purchasing an unclaimed property, it’s also important to make sure that you’re preapproved by your bank or mortgage lender – with a letter of preapproval – so that you can make a quick decision when the window of opportunity opens.

It’s also important to have a qualified real estate team behind you, with the knowledge and experience to help you spot possible repairs, expose any hidden fees, and assist you in deciding just how much to bid when the time comes.

Whether you’re circling an unclaimed property or are looking to buy or sell any other type of Chicagoland home, we’re here to help! Drop Real Group a line with all of your buying and selling needs. We have the team and the experience to help guide you every step of the way!

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