Is Buying a Foreclosure Really a Bargain? What You Need to Know

Posted on February 26, 2010 by Ed Butler

Buying A Foreclosure - Good Idea -or- Not? In today’s tumultuous economy, it’s no surprise that there are foreclosure properties to be found in just about every community across America—even ours. While a terrible hardship for homeowners to endure, foreclosures can present a unique opportunity for first-time home buyers and investors looking to purchase a “bargain-priced home” with the potential for building instant equity.

As an experienced real estate professional, I want to advise you to tread carefully when it comes to foreclosures—they might not be quite the bargain you expect.

Here are some important facts you need to know before venturing out into the foreclosure market:

Homeowners faced with foreclosure are understandably stressed and resentful, which can often lead to neglecting routine maintenance on a home. Sometimes, even deliberate damage is done. Assessing the home’s condition, therefore, is a must.
Foreclosure properties have often been vacant for an extended period of time. Look for problems caused by damp conditions, such as mold.
Get a thorough home inspection before bidding on the property. Once the damage/disrepair of the home is assessed, factor this in when bidding on the home.
Contact a real estate professional—like me, a Member of the Top 5 in Real Estate Network®—who is well steeped in the community and can provide information about pre-foreclosure properties, that is, homes that have been scheduled for foreclosure but have not yet gone to auction or been sold off. These homes need to be sold quickly as owners are trying to avoid foreclosure and its impact on their credit.
Last but not least, go to www.hud.gov for information on how to buy homes acquired by the U.S Department of Housing and Urban Development as a result of foreclosure action on an FHA-insured mortgage. The site also has information on special programs and opportunities for teachers, law enforcement officers and others.

While buying a foreclosure property takes patience and research, the results can be well worth your time and effort. For more information, please pass this on to anyone you know who might be interested in exploring a foreclosure purchase.