Buying a foreclosed home: Do pros outweigh the cons?

Foreclosures are up and surging in some states like New York and New Jersey, and they seem like great deals. But they are not without pitfalls.

Popular HGTV series House Hunters provided some pointers house seekers should weigh before finally hitting the market.

Obviously, foreclosed properties, whether sold at an auction, a missed payments seller, or through an REO (real estate owned by lender) agents, will sell for way lower than the new ones. Final prices of houses up for auction may just be around what is left of the balance owed to the foreclosing mortgage owner. Lenders, also dead set on getting the property sold fast, will be willing to negotiate the price and the payment terms.

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Moving in will be fairly easy, as houses usually would have been vacated, and titles are usually clear from liens and back taxes. Some banks offer financing within a certain due diligence period. They even offer to pay the commission of real estate agents.

But buyers should beware of some things that may upset them. Houses bought in auctions might not be flexible as far as payment terms are concerned: auctioneers might ask for full payment on the same day, and buyers may need to pay taxes and liens left. Banks may not be able to provide information on the history and condition of the houses, and usually, no previews or inspections are allowed, as these purchases are as-is sales.

Foreclosed homes are something to take advantage of given its pros. But being wise spares everyone from getting a ripped off by what seemed to be a bargain.

Ushud.com is a portal that lets you see up-to-date foreclosure information right at your fingertips. It is powered by online networking firm Heavy Hammer Inc. Visit this blog for more of what you need to know about purchasing foreclosed properties.