Buying a Foreclosure in Vermont: Practical Advice From a Real Transaction

When people hear the word "foreclosure," their first thought might be, "It's a good deal!"

And sometimes that's true. But what many people don't realize is that a great opportunity can also come with unexpected hurdles, delays, and a whole lot of waiting. 

If you’re considering buying a foreclosure in Vermont, here are a few things to understand before making an offer, and a real-life example of a Bennington purchase that shows why this matters.

Before You Buy: A Few Practical Questions

Where do you find foreclosures for sale?

Some bank-owned homes are listed with local real estate agents and entered in the Multiple Listing Service (MLS) alongside other properties for sale. You can also explore government-owned listings through HUD Home Store. An online “pre-foreclosure” label doesn’t necessarily mean a home is actually for sale.

Is buying a foreclosure different from a typical purchase?

It depends on how it’s being sold. A bank-owned property listed with a Realtor may involve familiar steps like showings, an offer on standard forms provided by the Vermont Association of Realtors, inspections, and closing.  These may have additional seller requirements. Some require offers to be entered through their specific online portal. An auction can have very different payment terms and inspection limitations. Have your Realtor and a Vermont real estate attorney help you understand the process before committing.

Can you get a mortgage?

Potentially, yes. Financing depends on your qualifications, the property’s condition, and the seller’s terms. The appraisal may require utilities to be on to evaluate the property's systems. If utilities have been disconnected or the property has been winterized, this can introduce additional costs, complications, and risks that should be discussed before making an offer.  Send the listing to your lender early and ask them what will be required for the appraisal. For example, homes that are served by a private well or septic system may require a water test and/or septic inspection, which will require running water. If the home needs substantial work, ask whether renovation financing, such as an FHA 203(k) loan, could be an option.

Can you inspect it?

Often, listed bank-owned properties allow inspections, but access and contract protections vary. Don’t assume “as-is” means you can’t inspect—or that an inspection automatically gives you the right to cancel.  Confirm the terms before making an offer.  HUD homes, for example, are sold “as-is” and have specific inspection procedures.  Again, if the utilities are off, you should negotiate this with the seller at the time of the offer.

Are foreclosures always cheaper?

Not necessarily.  Look beyond the asking price to repairs, closing costs, and the money you may need to carry the property while work is completed. A good opportunity needs to make sense for your overall budget and timeline.

Why My Clients Chose a Foreclosure Property 

Back in February 2026, I helped buyer clients go under contract on a foreclosure property in Bennington, Vermont. They weren't first-time investors. In fact, she has been a Realtor for over 20 years, and her husband is a contractor. They saw potential where others might have seen problems. 

Their vision was simple: restore the property and create safe, affordable housing for one of their adult sons. We went under contract on February 20th and expected to close on March 16th. 

Simple enough, right? Not exactly. 

The Unexpected Challenge: Title

What was expected to be a straightforward transaction quickly became a lesson in patience. The biggest challenge wasn't the house itself. It was the title. In real estate, "title" refers to legal ownership of a property and the rights associated with that ownership. 

As title issues surfaced, the transaction was repeatedly delayed while we waited for information, documents, and updates from the third-party company handling the foreclosure and title process. 

One extension became two. Two became three. Then four. Weeks stretched into months. 

At times it felt like everyone involved was waiting for answers from someone else. There was frustration all around. The only thing we could control was continuing to communicate, follow up, and keep moving forward one step at a time. 

The takeaway for buyers: the condition of the house isn’t the only thing that can affect your purchase. Have your attorney review title matters, and ask what still needs to happen before closing. If your moving plans depend on a firm date, talk through a backup plan early.

Why Communication Mattered 

One of the biggest lessons I learned is that real estate isn't always about negotiating contracts or finding the perfect house…sometimes it's about helping clients navigate uncertainty. 

Throughout the process, I checked in regularly with the buyers …not because there was always news to share. Most of the time there wasn’t. But when weeks go by without updates, people deserve to know someone is still advocating for them behind the scenes. 

Towards the end of the transaction, we were requesting the HUD statement so the buyers would have enough time to review documents and move funds needed for closing. 

It wasn't glamorous. It wasn't exciting. But it's an important part of the job. 

My buyers believed in the property and their vision for it. They were willing to keep working toward that goal, even when the timeline changed. Instead of focusing on the delays, they focused on the outcome.  That mindset made all the difference!

After nearly three months, four contract extensions, and countless emails, phone calls, and follow-ups, we finally closed on May 15th.  Phew!

Today, the property is in the hands of people who care about restoring it—and making it a home for someone they love.

Is Buying a Foreclosure Right for You?

This purchase worked out for my clients, but every property and situation is different.

Before pursuing a foreclosure, ask yourself:

• Does the full cost make sense? Include repairs and a reserve for surprises.

• Will my financing work for this particular property? Have your lender review it early.

• Do I understand the contract? Know your deadlines, contingencies, and deposit protections.

• Can I handle a delay? Consider moving arrangements, financing deadlines, and extra expenses.

• Who will help me evaluate the risks? Bring in an attorney, inspectors, and contractors as appropriate.

Patience and persistence helped us through this transaction. Just as important is knowing when a property’s costs or risks no longer fit your goals.

For these buyers, the opportunity was worth the wait. Helping them reach that point is what made this transaction meaningful to me.

If you're considering buying a foreclosure, investment property, or fixer-upper in Bennington County or Southern Vermont, I'd be happy to help you understand the process and determine whether it's the right fit for your goals. Every property is different, but having someone in your corner can make the journey much less overwhelming.

*Contact Emily Heyer to start your home buying journey.