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Foreclosure filings were reported on more than 424,000 U.S.  properties during the first half of 2017, which means there are plenty  of opportunities for those who want to invest in the foreclosure market.

Be aware, though, that purchasing a  foreclosures can be complicated. Would-be buyers who haven’t done their homework can make costly mistakes.

Zillow polled some real estate agents  to learn about the most common mistakes they see when it comes to  buying foreclosure properties.  Here are their tips to help you avoid  costly blunders.

1. Don’t limit yourself

It’s OK to go into your property search with the intent to purchase a  foreclosure, but don’t wear blinders and assume those are the only  homes you should check out. Yes, there are some competitively priced  foreclosures on the market, but the same can be said of traditional  listings.

Foreclosures often come with baggage — liens  against the property, repairs that need to be made, and so forth. A  traditional seller might be more flexible about taking care of repairs  or negotiating price. Additionally, if you limit your search to  foreclosed properties, you may not end up in your desired neighborhood  or with the style of home you’ve always dreamed of.

Don’t rule anything out. Keep an open mind so you end up with the best house for your money.

2. Don’t go it alone

Find a real estate agent versed in the complexities of the foreclosure market. Whether you’re looking at a pre-foreclosure, short sale or bank-owned property,  you’re going to need the guidance of a professional who has a  background in buying and selling these types of properties in your local  market.

Similarly, you must remember that real estate agents are not lawyers.  Foreclosure laws and regulations are tricky, and they vary from state  to state. Don’t rely on your real estate agent for legal advice; be  prepared to consult with a local real estate attorney who understands  how these purchases work.

3. Know your stuff

Know how much you can spend. Know the neighborhood where you want to  buy. Know the process. Securing early financing is important because it  will ensure you’re qualified to purchase the property. Being  pre-approved will give you greater bargaining power when the time comes  to make an offer.

Target a specific neighborhood or two to avoid becoming overwhelmed  by listings. Ask your agent to notify you of listings within these  neighborhoods that meet your other criteria, such as size and cost.  Check comparable recent sales to get a good feel for the market.

Even though you’re working with a qualified agent and lender, you  need to do some work upfront to become familiar with the basics of the  foreclosure process.  Learning the lingo will give you credibility,  which will help others realize you’re serious about this buying  endeavor. Basic know-how may give you the added bargaining power you  need to negotiate a better price.

4. Don’t skip the inspection

Sure, the house looks good, but what’s going on inside the walls and under the floorboards?

A 2011 survey conducted by Harris Interactive found that 72 percent  of U.S. homeowners agree the home inspection they had when they  purchased their current residence helped them avoid potential problems;  64 percent of respondents reported that their home inspection saved them  money.

The American Society of Home Inspectors website includes a searchable database of certified inspectors.

Tag along while the inspector is looking at the property. Ask  questions. Take notes. Most inspectors charge $300 to $500 for their  services; it’s up to you to figure out how much it’s going to cost to  address problems.

5. Look beyond today

A foreclosed home may decline further in value, so it’s smart to  approach the transaction with a long-term perspective. Sure, you may be  hoping to flip the property and quickly resell, but what if you can’t?  Are you prepared for the long haul? What will the property cost if you  hold onto it for five or 10 years? Crunch the numbers, or you may suffer  long-term financial repercussions.

                                                                                                                                             -content courtesy of Zillow

Viewing and buying forclosures and bank owned property

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