5 Common Mistakes to Avoid When Buying a Home Foreclosure

By
Real Estate Agent with Coldwell Banker Residential Real Estate
If my recent article about the three types of home foreclosures piqued your interest in making such a purchase, read on to learn a few of the common mistakes to avoid when you're ready to make an offer.

1. Don't get caught up in a bidding frenzy. Banks may “under price” their offering, hoping to generate multiple bids and sell quickly. Don't get overexcited - there's another foreclosure to bid on tomorrow!

2. Don't underestimate your repair costs. Carefully read the inspection report, and factor in an additional 10-20 percent of the purchase price for unexpected repairs.

3. Don't ignore the "comparables" for similar properties in the area. If there are abundant foreclosures in the neighborhood, be sure that you have the latest home prices to compare against, and keep your offer at or below those figures.

4. Don't go house hunting in a neighborhood full of foreclosures. If you're buying for the short-term because you may relocate or upgrade in a few years, don’t focus on a neighborhood with a lot of home foreclosures. These properties may continue to decline in value, meaning you may have to sell at a loss in the near future. Protect your investment by purchasing the only foreclosed home in a better neighborhood.

5. Do secure home loan pre-approval. You'll need to move quickly once you've found your ideal property. With your real estate agent as your field guide, your hunt should be successful!

Mike Morgan
Coldwell Banker Real Estate
"For Every Move You Make"

Whether you want to buy or sell a home in Miami, Palmetto Bay, Pinecrest, Dadeland Walk, South Miami, Coral Gables or Cutler Bay, you can depend on the Morgan team of realtors to assist you every step of the way during your real estate transaction.

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Dan Edward Phillips 04/11/2011 06:14 AM
Tags:
real estate agent
home loan
comparables
home foreclosures

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Rainmaker
716,562
Dan Edward Phillips
Dan Edward Phillips, Humboldt and Del Norte Counties, CA - Eureka, CA
Humboldt and Del Norte Counties, CA

Good Morning Mike, an excellent 'short list' for the buyer of foreclosures.

Apr 06, 2011 12:56 AM #1
Rainmaker
1,202,472
Chuck Carstensen
RE/MAX Results - Elk River, MN
Minnesota Real Estate Expert

Great simple tips for the buyer starting out.  ON the prices its about being aware what the homes are selling for and bidding smart or waiting for the next one.  

Apr 06, 2011 12:57 AM #2
Rainer
535,624
David Burrows
Classic Realty - Fairfax, VA
No Pressure, Just Seriously Devoted to Real Estate

These are great points to consider for everyone looking to buy a foreclosure. - David

Apr 06, 2011 12:57 AM #3
Rainmaker
926,706
Ron Marshall
Marshall Enterprises - Saint Michael, MN
Birdhouse Builder Extraordinaire

This all makes good sense.  I just heard from another realtor that one development was getting "saturated" with foreclosures.  Who would want to live in all that turmoil and vacancy?  Not me.

Apr 06, 2011 01:06 AM #4
Rainer
61,149
Brian J. Greenwood
Greenwood Real Properties - Canton, MA
Greenwood Real Properties @ Keller Williams Elite

Mike, great information, thanks for sharing!

Apr 06, 2011 01:07 AM #5
Rainer
139,717
Jeanne M. Gavish
Jeanne Gavish, Keller Williams Realty Elite Partners - Spring Hill, FL
Keller Williams Realty Elite Partners - CIPS,GRI,S

Very good, no nonsense pointers for puchasers. Thanks

Apr 06, 2011 01:23 AM #6
Rainmaker
564,787
Steve, Joel & Steve A. Chain
Chain Real Estate Investments & Mortgage, Steve & Joel Chain - Cottonwood, CA

Mike,

Great points all; with limited disclosures associated with REO's these are purchases the require a "buyer be aware" approach.

Best,

Steve

Apr 06, 2011 03:16 AM #7
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