Hi Trump,

Great question! First though, we should be clear on what type of a "foreclosure property" are you referring too, (as it means different things to different people)?

There is a foreclosure auction, in which you go to the county and bid at an auction. This is what you will hear about if you watch late night infomercials. There are many hidden dangers in this type of foreclosure purchase, and a buyer should thoroughly educate themselves on the entire process before they decide to jump in.

The most common type of foreclosure purchase that you hear about, is REO (real estate owned) which is what banks call it when they have foreclosed on a property. And that is what real estate agents will help you find and purchase. Once a property has gone to auction (as mentioned above) and there was no succussful bidder, or in the case of a "deed in lieu of foreclosure," the foreclosing bank now owns the property and has the right to sell it. They usually have to clear title prior to selling it (so taking care of liens, taxes, etc - but there are always exceptions). However, there can be many other "hidden dangers." We have seen a lot of strange things out there where the previous occupant has broken windows, spray painted walls, removed water heaters/furnances/other neccessary components, damaged electrical and/or plumbing, removed whole kitchens, and the list just goes on. So a buyer definitely needs to have the home thoroughly inspected as you never know what you might find.

The biggest step in buying an REO property is to have an experienced agent on your side.
We hope this information has been helpful! If you have any other questions, don't hesistate to contact us - we are here to help! Happy Home Hunting!

Jerry & Amanda Arend
The Arend Team @ Rita Comstock & Associates
707-586-TEAM
RealEstateTime@aol.com

Trump,
Consumers always seem to get their terms wrong. When you say "foreclosure property" are you referring to a property purchased at the County Court steps when it actually goes to sale or are you referring to the "post-foreclosure" process when the bank has taken the property back and they are now selling their "Real Estate Owned (REO)" properties? Two drastically different scenarios here!
Karen's answer addresses the later as I think Mary's does also. If you buy with cash at the Sale at the Court steps, good luck!! You are on your own and I DONOT recommend this unless you've got an advisor who takes you through the complete process as it has many a pitfall but can also be extremely profitable. Many of the properties which are sold at the "Trustee's Sale" are NOW on the market usually as a "Short-Sale" so you can have a Realtor/Licensee check this property out for you and perhaps get you into it to take a look around. If not then you'll need to be a sleuth and compile your own data.
Purchasing the REO is pretty much a straightforward proposition where you have representation of a Realtor/Licensee who can guide you through the process. This is often times tricky and writing the offer takes savvy!! Good luck!
And don't forget to tune in my real estate talk show on Sundays, KSROAM, 1350, 9 to 10am we are also streaming on the web at http://www.KSRO.com or http://www.MikesRealEstateShow.com. You can call in with this question at 707-636-1350. Hope to hear from you soon!

The most common "hidden dangers" are liens and taxes. I would also check for unpaid utility bills. If you're considering purchasing new construction or a condominium conversion which has been forclosed by the lender ask if the bank is providing any kind of warranty on the construction. Banks usually don't and state laws often don't protect consumers when a lender has received a deed in lieu of forclosure. This means it's critical to have a thorough structural inspection before proceeding with a purchase. Becasue without a warranty you'll have no one to go back to if you discover construction defects after you've purchased the property.

Trump- The buyer doesn't need to worry about taxes or liens because you will get Title Insurance that guarantees the house is free of liens and title is clear. Although foreclosure sales are "as is" I suggest buyers get inspections. There are no disclosures from the previous owner so an inspection can provide valuable info. Some of my buyers have spoken to the neighbors to get their insights. Hope this is helpful- work with an experienced real estate broker and she should able to help with any questions or concerns. Karen