| Owning a home is every American's dream, and one | | | | Choose a home that is already vacant and is ready |
| of the ways that many Americans realize this dream | | | | for you to move in. A home that is not immediately |
| is by buying foreclosures. A foreclosure happens | | | | vacant usually means additional red tape because you |
| when a homeowner is not able to pay the mortgage | | | | have to go through the hassle of meeting with the |
| fees on the property and is therefore, forced to give | | | | bank or lender and obtaining the necessary |
| up the property to pay back what is owed. There is | | | | preparations in order for you to move in the property. |
| no shortage of foreclosed properties in today's market | | | | Ask your agent to check the prices of nearby or |
| (approximately three million foreclosures are expected | | | | comparable homes. This is to ensure that you are |
| to happen this year alone), so you have a lot to | | | | really getting a bargain. |
| choose from, especially in areas where there is a high | | | | Don't: |
| concentration of distressed properties. One of the | | | | Buy in a neighborhood where foreclosure signs are |
| advantages of buying foreclosures is that the prices | | | | common. You are making an investment, so you have |
| are not too expensive, usually ranging from 20 to 80 | | | | to look for a home that is going to start gaining in value |
| percent below the market value. | | | | very soon. |
| However, buying a foreclosed property is risky and | | | | Search too broadly. Foreclosed properties are in |
| more complicated than a conventional purchase. It | | | | plentiful supply and you may get overwhelmed by its |
| takes more effort, on your part, to make sure that the | | | | sheet number. Target only a specific neighborhood so |
| homeownership process is as smooth as possible. | | | | you can choose properly. |
| You must do your homework. | | | | Shop only on price. Properties that are priced very low |
| To avoid making costly mistakes, these do's and don'ts | | | | probably have issues. Just like shopping in a store, |
| of buying a foreclosed property must be kept in mind: | | | | there might be something wrong with a low-priced |
| Do: | | | | property. |
| Investigate the advantages. Foreclosed homes are | | | | Participate in bidding wars. There is plenty of supply in |
| usually sold with significant discounts. Be forewarned | | | | the market, and plenty more to come, so there is no |
| that sometimes the cheaper the home, the greater the | | | | need to participate in bidding wars over these |
| issues you will face in maintaining it. | | | | properties. |
| Work with a real estate agent who is an expert in | | | | The easiest way to purchase a foreclosed property is |
| foreclosures. You need to interview agents and ask | | | | from a bank. Banks are very eager to sell a |
| them for information on foreclosures and distressed | | | | foreclosed property, and they will settle outstanding |
| properties so that you will know if they are experts. | | | | debts on the property so they can put it on sale with a |
| Familiarize yourself with the law. Foreclosure laws may | | | | clear title. |
| vary from state to state, and not all real estate agents | | | | Beware of buying foreclosed properties at auctions. |
| are familiar with these laws. You need to review the | | | | Most of the time you are not allowed to inspect the |
| foreclosure laws in your state and then get legal | | | | property and you have to be able to produce money |
| advice from a local real estate attorney. | | | | for the property in cash. |
| Inspect the property. Some foreclosures are in good | | | | Note that buying foreclosed homes involves more |
| shape, while others badly need maintenance. | | | | paperwork than a traditional purchase, most especially |
| Hire multiple inspection specialists. One specialist is not | | | | when a government agency is involved, so expect |
| enough to tell you that a property is in good condition. | | | | that the process will take some time and you will go |
| Hire an electrician to locate the electric system, hire a | | | | through many hurdles before you will be able to get |
| plumber to take a look at the plumbing system, hire a | | | | your hands on your chosen home. |
| pest control person to test the house for termites, etc. | | | | |