It really depends on the buyer and why you are buying. Are you a contractor or an investor? If not, then no, don't get caught up in the hype about foreclosures. Pro's buy the best ones, fix and sell them for a moderate profit. I say moderate because the risk and expense if calculated out may not be that much on an hourly basis.
Foreclosures come "as is" and provide no useful seller's disclosure. When a private party sells a home, they must disclose to you if there have been or are ongoing issues like plumbing, electrical, roofing etc. A bank never lived in the home and has no information about such things.
If you are looking for a primary residence don't get caught up in over thinking this. Find a great agent to represent you. Get pre-approved for a loan right away. Listen to the professionals you hire and don't listen to the latest fad or late night infomercial.
Buying a home is an investment of money, but also of life energy, emotion, experiences and time. A "great deal" that you hate will make a poor investment of all. Find the right pros and make the right decision for the long term. Best of luck.
In my opinion, usually a foreclosure would not be a good option for a first time buyer. It can be very complicated and most first time buyers will not have the wear with all to do the deal. Here is my response to a similar question just posted yesterday...
I am curious, why is it that you want a foreclosed property? Keep in mind that many foreclosed properties are in terrible condition and will require lots of work to make them livable. In addition, you have to take the property as-is without any warrantee whatsoever. Right now there is a lot of competition on foreclosed properties and most of the foreclosure deals that are made are done all cash without a mortgage contingency. Some foreclosure properties may not even be mortgage-able if the condition is really bad (unlivable).
I would suggest that if you are not buying all cash, get your self pre-approved for a mortgage. This is different than being pre-qualified. Pre-approved means that you are put through an underwriting process and the bank determines that they will give you a loan subject to you finding a property to purchase. It will cost a little time, money and effort, but it will give you a competitive advantage over other buyers as you need to be prepared to move quickly.
Most people who want to purchase a foreclosure do so because they feel they will get a good deal. This is not always the case. As a matter of fact, many foreclosure properties sell for market value or more because of all the people competing to buy them. Most purchaser's who get really good deals on foreclosures are buyers who purchase foreclosure "packages" from banks (you purchase 10 properties for $1,000,000 cash).
Looking at the big picture, maybe what you are looking for is simply a good deal. There are many other ways to find a good deal other than a foreclosure property. As an example you have estate sales and divorce sales and such. Either way, a real estate agent can help you. If you specifically want foreclosure properties, make sure the agent you work with specializes in foreclosures and has an "in" with the banks. The agent will not be able to help you properly if they do not have experience with foreclosure properties.
If I can be of further assistance, please let me know. Good luck!
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
In actuality, there are very few true foreclosures in NYC, and very many false ads on Trulia that ask you to pay money to find out the full details on these foreclosures - that don't exist.
Personally, I don't think a true foreclosure is a good idea for anyone, first time buyer or not. Regardless, you're putting people out of their home.. REO (real estate owned) is a better way to go - those are banks that have already seized the property and thrown people out, but the properties are usually in bad shape.
Where are you looking for and how much is your budget? I specialize in first time buyers. Contact me and let''s talk.