Buying a foreclosure is a smart way to get a nicer home for less money. You could end up getting an upper-class home for a middle-class price. However, buying a foreclosure can come with issues, so make sure you follow these tips so you can avoid some big mistakes that often come with purchasing a foreclosure.
Get an Inspection
Some people skip the inspection because they don't want to spend the money on it. While it can be difficult to let go of any extra money while purchasing a home, it is worth it. Not everyone maintains their home properly. If the house took a long time to become foreclosed, the owners could have lived in it for years without bothering to do any maintenance, because they knew they were getting kicked out anyway. You don't want to find out after the purchase is done that there are thousands of dollars worth the problems in the house.
Don't Get Impatient
Foreclosures pop up on the market all the time. So you don't want to see the first foreclosure that has an insanely low price tag and jump on it like it's the last house on earth. While it is depressing to pass up a great deal, there will be many more to come. You don't want to rush into a purchase in fear that other people have their feelers out. Take your time and look around, just like you would if you were buying a non-foreclosure.
Hire a Lawyer
Real estate doesn't often require a lawyer to simply make a purchase, but if you're buying a foreclosure, it's definitely a good idea. Sometimes foreclosures have liens against them and other legal issues that could potentially cost you a lot of time and money. Before you sign any paperwork purchasing your new home, make sure a real estate lawyer does a thorough investigation of the property to make sure you don't have any trouble in your future.
Know What You're Getting into
Some foreclosures are move-in-ready while others are as-is. If you have the time and money to fix up an as-is home, you can sometimes find a home for less than the cost of a new car. However, it's not worth the headache to everyone. Sometimes people will strip their home of everything that can be taken before they leave, including cabinets, door knobs, and light fixtures. You could find a home that is literally just a shell, which can end up costing you more money to renovate.
Consider the Neighborhood
A great deal is difficult to pass up, but you need to consider the neighborhood that the house is located in. Make sure you do your homework on the neighborhood and don't operate on assumptions. For example, find out if the property values of the homes in the neighborhood have been plummeting. If they have been, you will have a better idea of what you can spend on the foreclosed home and still make a profit that makes it worth your time. Also, check the crime in the neighborhood. Ask neighbors if there has been an increase of crime, or even call the local police station and ask about illegal activity in the neighborhood. It's more difficult to sell a home in an area with rising crime, so it may not be worth your time if you'll need to price the home significantly lower.
Buying a foreclosure can land you an amazing home in a great neighborhood. Just make sure that you know what work needs to be done, you get an inspection, and you hire a lawyer to investigate all of the legal aspects of the property before you make any commitments. And for more information and advice, talk with real estate agents in your area.