For better or for worse, there are a lot of foreclosures hitting the housing market right now !
While it may seem like an ideal situation, purchasing a home for less than it's worth; you need to make sure you take the proper precautions before taking that leap. Here are a few tips:
- Choose realtor wisely. The realtor you choose to represent you is a personal choice, but make sure you think about your decision from all aspects. Not only your comfort level with the individual but also his/her knowledge in the area, experience in industry, successful track record and of course, familiarity of the foreclosure market. Find a Real Estate Agent
- Budget carefully! A foreclosure can be a great deal, but it can also be a huge expense. Know ahead of time that if you fall in love with a foreclosure that you'll be able to invest the finances necessary after the home inspection.
- Get home inspected. My realtor, and any good realtor would, advised us to get a home inspection of the property. It wasn't a deal breaker should we find out anything needed to be replaced but it was good to know what was needed in the near future (in our case a new HVAC unit and hot water heater).
- Check surrounding area. If you're not familiar with the neighborhood, be sure to research the area. Check out local parks or community gathering places as well as school districts (for children and resale value). While in the neighborhood, glance at neighboring houses to make sure the vicinity has been kept up. This would include landscaping of your property and others, as well as conditions of the houses.
- Time on market-how long has the house been a foreclosure? Was it properly taken care of (i.e. winterized)? You don't want turn on the utilities until you know the condition of the pipes. The pipes could have cracked during a cold spell, water could start leaking into the walls, and mold could take hold when you turn the water back on. In addition to plumbing issues, time on the market also affects other things such as bugs and rodents getting into the home.
When shopping for a house, do your homework, especially in the case of purchasing a foreclosure. My recommendation would be to purchase a home warranty from companies like AHS, to help you with any surprises along the way. On top of the home meeting your aesthetic standards, it also needs to be a financially sound decision.