Foreclosures-To buy or not to buy

Alot of people believe that when they see the word foreclosed on a for sale sign or in an ad for real estate that it is automatically a great deal and that it is deeply discounted. The truth of the matter is that the banks (fannie mae, freddie mac etc.), are listing these homes to recoup there cost on the money they loaned, lawyer fees, foreclosure fees, realtor fees and holding costs for how long it will sit on the market. On the other hand some people see the foreclosure market as nothing but dilapidated old houses that aren't worth the time to look at. The truth is that with the correct amount of knowledge a foreclosure can be a great investment or home for the right person.



You must understand what it is that you are buying when you purchase a foreclosure. You need to know if your state has "right of redemption laws", you need to know who has these rights. You need to be comfortable with the condition of the property, whether you hire a licensed professional(Recommended) or you have someone you trust with a good working knowledge of all the systems in a home inspect it. Finally, be sure that you are purchasing a home that will meet your needs and fit into your budget so that your home purchase doesn't become a "great deal" for someone else down the road.