Real Estate Foreclosures – Everything You Need to Know

Posted Monday, March 21st, 2011 at 5:41am.

In recent years, the real estate industry has taken some major financial hits. With adjustable rate mortgages, many people purchased homes that they weren’t able to afford. Once the real estate industry began to affect the rest of the United States economy, even more people found themselves in the position where they had to foreclose on their homes. But one man’s misfortune can become another man’s opportunity. You can purchase real estate foreclosures for much less than the house was originally selling for. If you’re willing to put a little work into it, you may be able to afford more house than you thought you could.

When you’re looking at real estate foreclosures, it’s important for you to understand what you should look for. One of the most important things you need to look for is whether or not there are any major structural defects in the home. Check the foundations, the plumbing, and the roof in particular. Defects in these areas can be extremely costly to fix, and might eat up all of the money you saved on buying a foreclosed home in the first place. Unless you’re willing to factor the cost of these repairs into your overall budget, you should avoid homes that require major structural renovation.

Real Estate Foreclosures - Location, Location, Location

You also want to look at the neighborhood in which a home is located. While it may be tempting to consider real estate foreclosures in certain areas because they’re priced so low, the old real estate adage rings true: location, location, location. Once you've decided that the neighborhood is right for you, check to make sure there are no outstanding liens or fines on the property and that you're not purchasing someone else's debt.

But, ultimately, you should know what to expect when you visit real estate foreclosures. The banks are trying to move them quickly for a reason, and that could mean more work for you on the back end of your purchase. If you don’t have the time and money to invest in renovating a foreclosed home, then purchasing a foreclosed property probably isn’t the right choice for you. But if you look carefully, choose wisely, and are willing to roll up your sleeves and get your hands dirty, you could potentially be able to get a very nice home out of the deal.

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