Frequent sales on a property raises red flag?

Question

I'm looking at buying a condo that is a foreclosure. While I browsing through its sales history, I noticed it had a frequent change of ownership. It was sold 3 times within the last 3 years alone. And between 1988 and 2002, it was sold 5 times.

Does this raise a red flag?

Because it is a foreclosure, I don't know if the disclosures will really provide me with much information.

Is there a way for me to find crime-related disclosures for the unit elsewhere?

Answer 1

You could ask the neighbors if there was any type of crimes involving the condo or it's surroundings. Frequent sales could've been transfers? Or maybe some people went in over their heads in buying a condo.

Answer 2

Something very very wrong.  could be neighbors are noisy, bad odors, overpriced assessments.  I would run away and not look back.  What ever the problems with this place you do not need them.  Too many units on the market for you to buy this one.

Answer 3

Being a real estate investor, I don't really agree with the other posts.  I live in a neighborhood where property values are typically 1MM+.  To date, I've got 9 houses in a 1 block radius that were foreclosed on, and I can assure you it has nothing to do with being "a bad area, smelling funny or having noisy neighbors".  They were simply bad investments because property values have depreciated SO rapidly in the last year.

You have no idea what the previous situation was with the other owners.  Maybe they went into short-term, interest only financing when the market was booming and they simply couldn't afford their payment anymore when the rate adjusted.  Maybe the economy in that area is bad and they lost their jobs.  Maybe property value significantly decreased and the previous owners actually couldn't sell without ending up upside down.  The 'maybes' here are unlimited.

You can go online anywhere and check the crime rate in a certain area.  I highly doubt the neigbors will appreciate you knocking on their doors asking for 'dirt' on the neighborhood.  I was always taught to drive by a potential new home at LEAST 6 times at dusk and when it's dark out.  Likely you will get an idea of the atmosphere if you visit enough times.

If there was something drastically wrong with the property, it would be discovered during the inspection.  And if it wasn't disclosed when you purchased, the house would be tied-up in a legal battle, it wouldn't be sold or foreclosed on.  Homeowners do have rights...

Answer 4

That should be a red flag.  There may be something wrong with teh property.  I would NOT buy it.