Homeowner Included: How To Buy a Home When the Owner Just Won’t Leave 

A Colorado foreclosure listing went viral recently because it comes with an unusual catch: The owner is "included."

Located at 408 Garfield Ave. in Nunn, CO, the $215,280 property is being sold sight unseen. Buyers can’t view, inspect, or access the home before purchasing it. 

The reason? The owner—a widow who’s lived there for about 20 years—is actively fighting the foreclosure and intends to continue living in the home.

And yet, the outlook is the property will sell regardless of the unusual circumstances.

“The house will likely sell. A price is wrong until it is right. The deal is moot only if the legal fees, carrying costs, and repair risk exceed the discount, and for most families, yes, they would. But there are investors who do nothing except buy occupied litigated properties, and for them, this isn’t such a long shot,” says Luciano Oliveira, licensed attorney at Oliveira Lawyers in Frisco, TX.

Oliveira explains that the foreclosure has been through the appellate courts, the sale was judicially authorized, and the remaining fight is essentially about possession and timing.

This listing has fueled debate over whether the property is a good deal or a complicated investment with all too many legal and financial headaches. 

Before you consider an “owner-occupied” home, do your due diligence. Otherwise, the “bargain” may quickly turn into a costly mistake. 

The risks of buying a home the owner won't vacate

The risk of buying a home an owner refuses to leave comes down to two questions: How long will it take to get the keys and how much will it cost you?

“A motivated former owner can raise defenses, demand hearings, appeal, and file collateral suits. Each move can cost you months of taxes, insurance, and legal fees on a house you can’t even enter,” Oliveira explains. 

According to Oliveira, a typical uncontested eviction can take four to eight weeks and be completed for a few hundred dollars in court fees, not including attorney fees. 

However, in a situation similar to the one with the viral listing in Colorado, don’t be surprised if you spend about five figures on legal fees and months to gain possession of the property.

Then, there’s the condition risk.

The 2,040-square-foot home in Colorado does not allow inspections, so you have no way of knowing what repairs or maintenance might be required before making an offer. 

“You’ll have to estimate those potential costs and add some cushion, because you won’t be able to renegotiate the price afterward,” adds Oliveira. 

Whether or not a home with an owner is worth it depends on the unique property and situation.

Some properties are genuinely too troublesome, even for seasoned professionals. 

“Foreclosed homes are typically sold as is via a quitclaim deed, meaning you have no recourse against the seller if you come across any problems with the property. Therefore, purchasing a foreclosed house without an inspection beforehand is taking on significant potential risks,” explains James Dodge, a professor of law at Purdue Global Law School based in Los Angeles.

For older homes, this may include the risk of lead paint, asbestos, and other environmental factors that will need to be remediated. With older and newer homes alike, there is also the risk of potential structural and maintenance-related issues.

“Adding to those risks, the costs of the eviction process means that the purchaser of such a property will need to have the financial ability to absorb significant upfront costs,” adds Dodge.

Ultimately, it’s up to you to weigh the costs and risks involved to determine whether the home is worth your time.

How to do your due diligence if you're interested

If you find a property you like that comes with an owner, proceed with caution.

The key is to hire an experienced attorney who specializes in foreclosure and eviction litigation.

“Enagage the attorney to provide a formal review of the title, determine if the occupant has legal possession, formal title and/or right, and provide a thorough estimate of the expected legal and holding costs,” says Cameron Walker, real estate expert and manager of the Agent Network at Clever Real Estate in St. Louis. 

Oliveira also recommends talking to your home insurance company before closing, because an occupied home you cannot access is not a standard policy. 

“And leave room in your number for a genuine cash-for-keys offer. It is often the cheapest legal tool available, and treating the occupant with respect also tends to shorten these cases,” Oliveira adds.

Walker warns that skipping these steps can turn an investment opportunity into a serious gamble.