1. In general, a foreclosure property should be at least 20% lower than similar homes in the area.
2. Buying a foreclosure at auction is risky. The home could have liens, be in poor condition, or have other legal headaches attached. Buying bank-held or HUD foreclosure properties is safer.
3. Do your homework! Rumors of bargain prices have attracted buyers to the foreclosure market, but it’s not always a good deal. Sometimes multiple bids on a property drive up the price making it less of a bargain.
4. There are a lot of un-reputable websites that promote foreclosures. A good website to use is RealtyTrac.com. You can also search the entire Houston MLS Database at BuyandSellwithShannon.com/Buy
5. Work with an experienced Realtor (like me!) that has access to foreclosure data through the Multiple Listing Service. Impulsive or uneducated buyers can get taken advantage of and acquire a home with many problems.
6. Make sure you have the home inspected during your option period. If the bank will not allow an option period, get it inspected before putting in an offer. Your inspector will be able to spot water, pest, and structural problems. If the inspector recommends it, hire an HVAC professional to check out the heating and air conditioning system.
7. If there are repairs that need to be made you should get estimates for repair costs before getting locked into a contract on the home.
8. Get a Pre-Approval before house hunting, as the bank will require that with your offer.