What to Look for When Buying a Foreclosure: A Real Walkthrough
- Wayne Turner
- Jul 13
- 6 min read
Updated: 18 hours ago
Foreclosures can be some of the best deals you'll find in real estate — but they can also come with expensive surprises if you don't know what to look for. I want to walk you through an actual foreclosure with you, room by room, and point out exactly what I'm checking and why. After almost 30 years of buying, flipping, building, and selling real estate, these are the things that consistently save buyers thousands of dollars.
Always Get a Full Inspection — Not Just One
When you're buying a foreclosure, a standard home inspection isn't enough. You also want a dedicated plumbing inspection and an HVAC inspection. And don't just use whichever inspector your agent hands you. Your agent should give you at least three recommendations, but it's still on you to do your own homework:
How many years have they been inspecting properties?
Are they licensed and certified?
Will they give you a full written report?
Even with a great inspector, walk the property yourself. It's going to be your house — there's nothing wrong with looking closely.
Small Problems Are Easy to Spot. Big Ones Aren't.
Obvious issues, like a little wood rot on a column, are usually easy and cheap fixes. It's the hidden damage that gets expensive. A clogged gutter is a perfect example — leaves hold water, water wicks back up under the shingles, and before you know it, you've got a fully rotted roof deck. That one mistake cost me $11,000 on a property I owned. It's exactly the kind of thing you won't notice on a quick walkthrough, but it's exactly what a thorough inspection should catch.
Watch for Intentional Damage, Not Just Wear and Tear
Most damage to a distressed property isn't intentional — fires, floods, termite damage, and wood rot happen regardless of how well someone maintained a home. But sometimes people leaving a foreclosed property do damage on purpose out of frustration. One of the most expensive: pouring dry concrete mix down a drain, then running water through it. Once that hardens, and if the house is built on a slab foundation, you could be looking at tens of thousands of dollars just to break up the slab and fix the plumbing underneath.
Get the Utilities Turned On Before You Inspect
Banks do not turn on electricity, water, or gas at a foreclosure. That's on you, and you'll need to put the utilities in your own name — usually just for a short window, about two weeks, so you can complete your inspections.
This matters because you can't catch a plumbing problem (like that concrete-in-the-drain scenario) without running water through the system. Don't schedule your plumbing inspection until the utilities are on.
What "Winterized" Really Means
Your agent may mention that a foreclosure has been "winterized." That means antifreeze-like solution has been poured through all the plumbing pipes to protect them while the property sits vacant — similar to what you'd put in a vehicle.
Here's the catch: some of these properties sit empty for two or three years before a bank even takes possession. Winterization doesn't guarantee the pipes came through that time undamaged. Always get the utilities turned on and complete a full plumbing inspection rather than assuming winterization means everything's fine.
Check the Attic Thoroughly
The attic tells you a lot about a property's condition. While you're up there, look for:
Chewed or damaged ductwork
Whether the HVAC system looks new, maintained, or neglected
Whether the water heater is connected and functioning
Signs of critters currently living in the space
Charred wood near chimneys or vents, which can indicate a past fire
Check the Drywall for Contamination
While you're in the attic, pull back the insulation and look at the backside of the drywall. If it's marked as imported from China, that's worth investigating further. After hurricanes hit the Gulf South years ago, some rebuilt homes used imported drywall that was later linked to health complaints and corrosion of electrical wiring in the home. It's an easy thing to overlook, but a quick check in the attic can save you a much bigger headache later.
Termites Are Common — Don't Panic, But Don't Skip the Inspection
In the Gulf South, termites are practically part of the landscape. I've dealt with them plenty of times — sometimes it's a simple $450 treatment with zero damage. Other times, what looks minor turns into thousands of dollars in repair work. I once had a client who suspected wood rot under her raised, crawl-space home. Turned out to be termite damage that ran about $6,000 to fix. Had we not looked closely, we never would have known.
Signs to look for include visible termite trails, treatment systems already in the ground, and any soft or hollow-sounding wood. Sometimes the signs are obvious. Sometimes they're not — which is exactly why a professional inspection matters.
Look for Signs of Critters Under the House
Holes near a porch or foundation often mean something is living underneath — and if left long enough, burrowing critters can contribute to foundation issues. It's usually not a big deal to have them removed, but it's worth checking. And a word of advice from experience: dress appropriately when you're walking these properties. Wear jeans and boots, and cover your feet and legs. Fleas and other pests are more common under vacant homes than you'd expect.
Inspect the Brick and Foundation for Cracks
Step cracks in brick are common and usually not a major concern. Actual cracks running through the brick itself are a bigger deal and worth having reviewed by a structural engineer, who can tell you whether the movement is old and settled or ongoing.
One major cause of foundation movement: trees planted too close to the house. Root systems search for water, and in hot, dry conditions, they can physically shift a home's foundation. If you see a cracked brick near an old stump or sparse, oddly growing limbs, there's a good chance a large tree used to stand there and already did its damage. It's also a good reason to keep new trees well away from your home's foundation going forward.
Have Well and Septic Systems Inspected Separately
Many foreclosures, especially in rural areas, have a private well and septic system instead of city utilities. Once power is on, a well system typically pressurizes to 60–70 PSI so water flows normally through the home's faucets.
Septic systems generally last around 30 years but need to be pumped every 2–3 years. Most parishes and counties won't approve utility hookups until the septic system has been pumped and inspected, so you'll need to request a short variance specifically to complete your due diligence.
Know What Mortgage Companies Actually Check (and Don't)
Here's something a lot of buyers don't realize: mortgage companies require an appraisal, not an inspection. You're responsible for inspecting the property yourself, no matter how much you're borrowing.
That said, the appraisal still matters. If an appraiser notes something like a missing stove, that alone can disqualify the property from FHA or USDA financing. The same logic applies to VA loans — properties in serious disrepair, without flooring, HVAC, or basic appliances, typically won't qualify. And once you're under contract, banks won't allow you to do any repair work on a property that isn't legally yours yet.
Get a Survey (or Review the Existing One)
Just like with any property purchase, get a current survey or, at minimum, review the most recent one on file. Don't rely on an old survey and assume nothing has changed — fences, sheds, or other structures may be encroaching on the property line, and you'll want that addressed before closing.
The Bottom Line on Buying Foreclosures
Foreclosures can absolutely be a great investment, and I've built a career finding value in properties other people walk past. But you have to slow down, do your due diligence, and know exactly what it will cost to bring a property up to your standards before you make an offer. Don't get emotionally attached to a house — look at the numbers and remember: you make your money when you buy, not when you sell.
Looking for foreclosures or bank-owned land in your area? Connect with Wayne — he can help match you with an agent anywhere in the country who knows how to find these deals.
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