Foreclosures are a tricky business, and despite what the media and 'investment gurus' are leading you to believe, they are not always the best deal.
Remember this: The wave of foreclosures that are happening right now are the result of subprime loans made during the housing boom. Those loans were made when market values were much much higher. Therefore, many of these banks, though not in the business of selling real estate, are holding loans that are larger than the worth of the house. Meaning? No equity. A good deal -- a really good deal -- is buying into equity. Not only that, these banks are not so crazy about giving up these houses for less than what is owed to them. Sure, they may be forced to adjust the value of the house they are holding downward to stay inline with today's prices, but they are not likely to go BELOW market value. Basically, the prices are likely to be the same as any other home out there on the market, except....
Often times when people go into foreclosure, they stop taking care of their homes. They are angry, sad, feel it's not worth it. So guess what you are getting? Deferred maintenance issues and a bank-owned property with no disclosures.
Think again. Deals can be had, but right now some of the best deals out there are houses on the market that have not gone upside down on their mortgages. Houses still owned by their owners. Houses with disclosed history. Houses whose ultimate sale price is a decision controlled by the owners who may be willing to strike a deal with you - much more so than a bank.
