When considering buying a home that is in foreclosure or about to be, one must decide if it is really the best deal based on many factors.

Foreclosure homes are not always the best deal in that they are often in disrepair, in an undesirable area or have liens against them that must be settled prior to purchase. A home that is in foreclosure often needs a lot of work as the “owners” usually begin neglecting repairs or upgrades once they realize that they are about to lose their home. The landscaping is often in need of work and the interior as well as the exterior of the home often needs a lot of repair or updating, and cosmetic touches can be expensive and take a lot of time to finish.

Also, check on the property taxes. A lot of foreclosure homes have delinquent real estate taxes attached or delinquent homeowners insurance payments. These will have to be paid up to date prior to purchase or loan closing. Other delinquencies, such as homeowner’s dues (on properties that have a homeowner’s association) may need to be brought up to date.

Foreclosure homes are not always the best deal for young couples looking to buy their first home because there may be so many repairs and updates needed that cannot be financed in the mortgage loan that they secure. Homes that have been abandoned for months may have been looted…yes, looted. This is not uncommon today. Once people realize that a home has been abandoned because the owners could not afford the payments, they might decide that the home offers appliances and other items of value that are “available” for the taking…think paddle fans, alarm systems, window air conditioners, built in shelving, cupboards, etc. This is a sad but unfortunately common occurrence with homes that are abandoned or non occupied.

Location is a key when buying a foreclosed home. Purchasing a foreclosed home in a distressed area probably will not be a good deal all in all. For one thing, trying to resell this property within the next five or six years will be nearly impossible. Also, if you wish to rent this house, you will probably not realize the monthly amount that you would in a better area. You will have to maintain the home, which could be costly. There are so many factors to consider, but it is best not to purchase a home in a questionable market. In fact, it would be better not to purchase a home at all than to purchase one in an extremely downward market.

Make sure you do your homework before you purchase a foreclosed home. The house should be in decent shape, in a good area, with taxes and insurance paid up to date. Look at every aspect: Cost to finance, repair or rehab, and other expenses. If you research the market, you will probably be able to find a bargain to live in or rent out. If you don’t, you will more than likely be stuck with a lemon. So be very, very careful.