Don’t get caught in the foreclosure frenzy

Jennifer McClelland | RSS | Fri, Nov 20 2009 | 0 Comments

In this real estate market, you can find yourself thinking that a house is a good deal just because it has been put on the auction block after a foreclosure. While it may seem that you are getting a good deal on a house, there are certain things that you have to keep in mind to keep yourself from getting caught up in the frenzy and getting into a house that you actually don’t want and that you will find yourself resenting in the future.

First and foremost, don’t get caught up in a bidding war for a foreclosure unless you are 100% sure of what that property is worth. Some times a foreclosed property will be completely stripped of anything that is worth ANYTHING in the property such as copper wiring and other fixtures throughout the house. While many of the houses on the market aren’t that dire, it is still important to try to have a contractor or someone else with you who knows how much repairs on the house are going to cost.

In my opinion it is the most important to not get caught up in thinking that you have gotten a deal on a house. In some cases foreclosures are selling for more than houses that are actually “for sale” in neighborhoods just because of the buying frenzy that surrounds the listings.

Ensure that you know what the neighborhood is worth prior to bidding on a home.

Secondly, after you have made the decision to buy a home that has found its way into the foreclosure listings, it is important to make sure that you are approved for a mortgage for whatever your budget is. Having that pre-approval letter will definitely make any offers you make on a home that much more appealing.

Third, remember that the banks that have listed the houses are likely not going to fix them up at all. The bank owned properties are almost always sold “as is” and it takes an act of Congress to get banks to fix things in these houses; they would much rather sell to the next buyer who isn’t requesting that things be fixed in the house.

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Tags: pre approval letter, foreclosures, copper wiring