How to Buy an Abandoned House in New Jersey

When homebuying, some folks look for fixer-uppers. They may appreciate the unique charm of a house that needs some TLC or enjoy the process of renovating. They may simply appreciate the lower sales price. Regardless of the reason, purchasing time-worn properties requires a little bit of extra planning—especially if the home is abandoned.

An abandoned property is a home or lot of land that is vacant, neglected, or not actively maintained by the owner. A property can be abandoned for many reasons: the owner may pass away, face foreclosure, or simply choose to walk away from the home. Keep in mind that an abandoned home is different from a vacant home or a condemned home. A condemned home has been deemed unsafe for habitation by a local authority, while a vacant home is often legally owned and maintained.

Purchasing an abandoned property will follow a very similar process to purchasing a regular property, but with a bit more research, legal complexity, and planning. Securing ownership of an abandoned property can be unpredictable. The more you know about the process, the better you will be at navigating the road bumps.

Here is an NJ real estate attorney’s guide to purchasing an abandoned property:

1.  Find An Abandoned Property

You can find an abandoned house through a lot of the same ways you would find any house. As with any home search, your first step should be finding an experienced New Jersey real estate agent who understands the local market. Because abandoned homes are not typically advertised for sale, a real estate agent can help point you in the right direction.

They can help you check foreclosure and abandoned property auction listings, public notices, and use their local expertise to locate homes that appear unmaintained. Once you find a home you are interested in, they can also help you verify the status of the property.

2.  Contact the Owner

This part can be tricky if the home is truly abandoned or the owner is deceased. Ownership may not be immediately clear through a simple search. To get in contact with the owners, you may try:

• Tax Records: Property tax records are a valuable resource for identifying the owner of an abandoned property. Many NJ counties and municipalities offer online access to tax records through the tax collector’s website. You can typically search by the property’s address. Even if online records are unavailable, you can request the information in person. Tax records will show the owner’s name, the assessed value of the property, tax payment history, and delinquency status. This valuable information can help inform your next steps.
• Title Search: A title search can help you discover what kind of liens, unpaid utilities, or municipal fines are associated with the property. Since these debts attach to the property, not the owner, it is important to understand your responsibility for the home purchase. A title search may also help you determine the owner's status or location.
• Write a Letter: You may be able to use the public tax records to find a mailing address for the owner. In this case, you could send a letter stating your interest in the property.
• Attend an Auction: If the home is scheduled to go to tax auction soon, you could attend the auction and make a bid. Keep in mind you will need to cover the costs of a bid, including the upfront payment required to secure the property.

If you can contact the owner and they agree to sell you the home, you can finally begin the typical process of purchasing a house, with some special considerations.

3.  Financing

Abandoned properties, or any properties sold at auction, are typically cash-preferred. Because homebuyers often need to finance the purchase by proving the home's value to the lender, it can be difficult to secure traditional financing for an abandoned property. Renovation loans like the FHA 203(k) may be an option for those short on cash. You will often need to prove the home is habitable to secure this kind of financing.

4.  Get an Inspection

Home inspections are a critical part of the homebuying process for all real estate transactions—but especially for abandoned homes. After all, you do not really know what kind of maintenance, if any, has been done to the home while it has been sitting unoccupied. You need to know how much work the property needs to make the home livable and whether the repairs and renovations are within your budget.

Some auctions do not allow you to inspect the home before purchase. This is one of the bigger risks with purchasing abandoned homes. If the bank or county is now allowing inspections, you still have the option of bringing an inspector with you to the auction to see what they think of the property from the outside and give you their feedback.

Keep in mind that if you use a renovation loan to purchase your home, you may have to complete all necessary repairs to make the home habitable before closing.

5.  Purchase the Property

Once you determine whether you are purchasing the property with cash or financing, you can proceed to closing. Work with your real estate agent to ensure you are following the terms of your contract, fulfilling your loan obligations, and following all local homebuying requirements. You may need to wait longer to reach your closing date, as additional legal processes may be required to purchase the abandoned property.

Should I buy an abandoned house?



Purchasing an abandoned property makes sense for some, but it can be a nightmare for others. If you are flexible, patient, skilled in-home repairs, and willing to wait through a longer purchasing timeline, this may be the right path for you. And while you can save money in the long run by purchasing an abandoned home, these kinds of purchases often require more money up front than traditional purchases. You will need cash on hand for the auction, repairs, settling open liens, and other unexpected costs.

The cost of rehabilitating an abandoned home can be massive if you do not have a plan for repairs and renovations from the beginning. It is crucial to understand exactly how much you can expect to spend to make the home livable and address code violations. Otherwise, you could end up spending way more on repairs than the home is actually worth.

Abandoned properties can pose a significant risk to homebuyers, but sometimes that risk is worth the result. If you do your research, work with experienced real estate professionals, and understand the cost of repairs, you can turn an abandoned property into a worthwhile investment. Whether you are looking for a primary residence or an investment property, Veitengruber Law can help. We are an experienced real estate attorney and law firm in New Jersey. We work with buyers to make their real estate dreams a reality.