Laura Lambert

This is a great question because contrary to what you may have heard, a serious buyer should not be starting their search with foreclosed properties. The secret to creating wealth through real estate is not overpaying, and there are several problems with foreclosed properties that can actually make them MORE expensive than other properties.

Some of the problems with foreclosures are: there are frequently competing offers that bid up the prices; properties being sold “as is” means there may be serious problems that have not been disclosed, costing you more later; the banks do not have to play by the rules and can force you to either increase your offer or lose the deal; the process can be very lengthy and if it eventually doesn’t work out, you may have passed up better properties!

Assuming you have already been pre-qualified if you need a loan, the place to start is with your realtor. There are some tremendous deals in this market with properties that are NOT foreclosures. Your real estate agent will know the local market and can see which properties have been on the market the longest, which have had continuing price reductions, which have been withdrawn, etc. This information is very powerful in negotiating a good price.

Good luck! - Tue Nov 17 2009, 23:33