Many people want that very good deal on a big piece of land in the country. Although there aren't as many foreclosures on Minnesota acreage as there were a few years ago, from time to time, there is a deal that might be too good to pass up on a hobby farm in the Minneapolis/St Paul suburbs. However, buying a foreclosure is different than buying from a more traditional seller. The biggest difference when buying a property from the bank is that buyers are often required to waive their rights to a seller’s disclosure. (This actually does make sense; no one at the bank can properly complete the disclosure because they have not lived in the home.) In most cases, no one from the bank has ever set foot on the property. So when buying a foreclosure on acreage, what are some of the things home buyers should do to be avoid a housing nightmare ?
**Ask for a Compliance Test for the Septic System.
A private sewage or septic system is one of the most costly aspects of a rural home. As a alternative to a public sewer connection used in the city, homes are constructed with a private septic system to handle sewage and waste
water. Not all septic systems are the same. Each is designed for the
specific property and size of the home. Even a new septic system can
fail if not properly maintained.
How do you know if the septic system is
working properly in foreclosed home? Ask the bank to have a third party inspect the septic system and
supply a report of compliance. This MUST be written into the purchase
agreement as a contingency of purchase. (i.e. Sale is contingent on the
buyer receiving a current compliance certification for the septic
system.)
If
you have never lived on a home with a private sewage system, it is important to
educate yourself on how to best maintain it.
**Well Disclosure is Mandated by State Law
In Minnesota, well disclosure at the time of sale is mandated by state law as a part of the
Ground Water Protection Act. A seller must provide information on the
location and status of all wells on a property at the time of sale. Just because a bank is selling the home, does not change the law. Any known well and its condition must be documented on a disclosure. If
this information is known and not provided, the buyer has 6 years in
which to file a claim against the seller. Often when purchasing a foreclosure the bank will ask a buyer to waive the
right to a disclosure and purchase the home AS-IS. In this situation, it is a good idea to visit the MN Dept of Health webpage on Finding Abandoned Wells
prior to purchase. Abandoned wells can be very expensive to seal
properly. Improper sealing is not only illegal, it can be detrimental to
the ground water. Read More information on Private Wells.
**Are there any underground fuel tanks?
Often
people looking at acreage for the first time will have questions about
the huge propane fuel tank located near the home. These tanks are
usually only seen in the city at gas stations where homeowners fill
their small propane tanks for the weekend BBQ. In the country, the large
tanks are in many backyards as the source of fuel to heat the home and
run appliances. But what if there is no visible tank? Don’t immediately
assume the home is heated with natural gas. Homes on large acreage are
rarely heated with natural gas as the cost of bringing the gas line to
the home can be cost prohibitive. Check for underground fuel tanks. Even
if there is a propane tank visible, there could be an old fuel tank on
the property either above or underground. The removal of underground
fuel storage tanks can be dangerous and is regulated by the Minnesota State Fire Marshal as well as the Minnesota Pollution Control Agency.
**Check the Trees!
Buying a home AS-IS also applies
to the landscaping. Check for dead or dying trees on the property. If any are found, it would be
a good idea to assess them to see if they died due to a disease. The most common tree killers in Minnesota are oak wilt, Dutch elm and the emerald ash borer.
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