Buying Distressed or Foreclosed Properties 

Distressed properties are some of the most popular homes in today's market. Probably the biggest reason to purchase a property in foreclosure or a short sale is the allure of getting a 'deal.'  Discounts often can range from 20 to 30 percent off on a short sale or foreclosure compared to a sales price of a nondistressed home. But despite the big bargains, buyers really need to take certain things into consideration before make that move. Consider some of the following tips when searching for that next great 'deal.'

• Primary residence purchases or beginners may want to stick with REOs. New buyers may want to avoid short sales, which often involve months of negotiations and can sometimes end in forclosure auctions that require all cash purchases. In contrast, REOs can be about the same as going through a triditional home purchase, can lead to much less stress and have a happier ending. Since the bank has no emotional attachment to the property, their main objective is to lose the inventory as quickly as possible with the least amount of monetary loss as they can get.

• Inspect, inspect, inspect! Almost all distressed properties are sold “as is” and many can come with some costly problems if buyers aren’t careful. Your real estate consultant should always recommend having a home inspection prior to close. Buyers will then know any potential problems associated with the home, along with an idea of what these issues might cost to repair. Even though the bank won't want to do any repairs uncovered during the inspection process, thus re-iterating the "as is" sale, the buyer can sometimes use this information to negotiate a lower price.

• Don't count on the chance to "flip" the home right away. One of the more important things for buyers to remember is that because of the market, it isn't wise to expect a huge increase in value immediately. Because we are still in a reccessional period in the real estate market, home prices are still going to take a while to start coming back up.  Just consider this an opportunity to get in on the ground floor with an investment that you can buy low now and hopefully sell high one day!

To refine your foreclosure property search, choose the advanced search option and the foreclosure tab will then let you pick more options for your search.