Old House Renovations

You can get a great deal on a foreclosed home. You can also get a deal so bad that you might as well toss your money in the trash. The key to getting a good deal on a foreclosure is to proceed with caution and a whole lot of common sense.

First, read everything in the listing. Then, read it all again. Wow, did you almost bid $1,000 as a down payment on a $25,000 foreclosed wreck? Good thing you read the listing a second time and saw that paragraph about your bid only being a down payment and not the full purchase price! Other things I’ve noticed are fine print notes about additional fees or a casual mention that you’re not buying the house free and clear. (Oooh, I have $3,400 in back taxes and water bills to pay if I buy this one.)

Next, check out the seller’s feedback. Make sure it isn’t all for buying stuff. You want a seller who made other people buying foreclosures really happy, not a seller who can shop for bargains!

After you’re pretty happy with the listing, check out the settlement terms. Do you owe the whole amount within three days by cashier’s check? Is there an outrageously high interest rate on the financed portion?

Now, it is time to evaluate the condition of the house. Look closely at the photos. Nice, nice, great moldings, okay… Whoa, Nelly! Is that a piece of the ceiling on the floor?

Finally, if you are anywhere near a listing you are seriously considering, take a road trip. You may not be able to go in the house and look around, but you’ll be able to see the neighborhood and you’ll be able to see if the outside has deteriorated since the photos were taken.

Finally, I have a bonus piece of advice for you - go with your gut feelings. Don’t bid if you feel nervous or unsure about whether this is the right thing for you. Happy bidding!

photo by svilen mushkatov/stock exchange

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