Great Read but Peggy adds a 4th lesson :
Remember that "one" of the reasons you are getting a discount from the bank on this home is because you are not receiving any disclosures about the home's history. We may see some surprised buyers if they don't take the time to do their due diligence BEFORE they purchase a Bank Owned home.
Real estate bargain hunting: Three lessons
•1. There really are bargains out there. And you should follow along, whether you're in the market or not. True, buying foreclosures has been a game mainly for real estate professionals trolling the market for desperation. Owners had typically let the place fall apart along with their finances. These homes weren't for everyone. Now, with declining prices and the irrationally exuberant lending of the recent past, foreclosures are coming to more respectable owners in more respectable areas. Upshot: if you shop carefully you can get far more for your dollar than even a few months ago.
•2. The free market still works. To find the bottom of a market -- either yours or one you plan to buy into, track the lowest foreclosure sales. Have a real estate professional help you examine the statistics. The bidding war on the foreclosure speaks volumes about the real market price.
•3. It's still about location. Obviously, not every foreclosure in every neighborhood is an opportunity. Vines suggests: "The best bargains are found in neighborhoods with a lot of new construction and sales in 2005-2006, priced somewhat above the median price for the greater area."
Watching the foreclosure market will give a snapshot of where you are and where you're going with real estate. And you might find a good deal along the way.
By Jennifer Openshaw, Peter Sander contributed to this article.