Foreclosure Buying Tips

Before buying a foreclosure you need to know what to look for. Do not just assume that because a house is a foreclosure that you are getting the home at a bargain. You will need to do just as much due diligence with your research as you would when you are buying any other property.

There are also some unique issues and risks that need to be considered when purchasing foreclosures. Below are some tips on what to look for to ensure you are making a sound investment in a foreclosure:

• Some foreclosures accept bids and some are on the condition of sight unseen. Others you can go to the property but can not see the interior. In such cases you are gambling on the condition of the house. This can be a very risky move.


• If you are able to inspect the house before making an offer, do so thoroughly. Some homeowners, when faced with foreclosure, sell off appliances or cabinets to get some extra money. Some are bitter and purposely destroy parts of the home. Others still have not had the money for proper care and maintenance and the home is uninhabitable.


• If you want to bid on a foreclosure that is also a fixer upper, make sure you factor in labor, materials and contracting costs into the total sale of the property. Also, make sure you or someone reliable is available to make the repairs in a timely manner so you can either get it back on the market quickly or get it occupied.


• Make sure you are aware of what current homes are selling for in the area. You want to get a foreclosure because you will make money from the deal so make sure what you are getting actually is below market value.


• Find out if the house is vacant. In some cases the previous tenants are still in the home and if you buy the foreclosure you will be left with the arduous task of going through eviction proceedings. If you are prepared for this, make sure you know it is a possibility they will not leave the house in as good condition as how you bought it.


• Have a known budget for buying foreclosure homes and stick with it. Get preapproved for financing so that is one less step you have to take when you want to make an offer on a foreclosure.


• Stay unemotional about the purchase. There are other homes available. You want to make a savvy investment and you can not do that if you get too attached to a home before the final paperwork is put through.


• Be aware and realistic about the risks and rewards of buying foreclosures. Take the necessary steps to research the area and the house or property before buying.