Buying foreclosed property can be a very profitable venture; it can also become a financial nightmare, if you don't know what you're doing.

FIRST, let's dispel the most common myth about buying foreclosed property, which is, that foreclosed property can always be bought at a price that's substantially below its market value.

FACT: Lenders have become rather astute at selling their foreclosed properties. For example, most lenders market their foreclosures using the "eBay" method; they price it very low to attract as many buyers as possible in order to cause the buyers to bid up the price. Consequently, many foreclosed homes sell for the same or MORE than their market value. And, that's before considering how much money it will take to repair and/or renovate the home to make it livable.

A related problem, is that people think they're going to make a "killing" by "buying low and selling high." Well, the only way that theory can possibly become reality, is if the property is bought at the right price at sheriff's sale. But, that requires an immediate all cash purchase, as well as the knowledge of the right price to buy at. It also requires knowledge of the condition of the property and how much it will cost to repair and/or renovate. Buying at sheriff's sale is not something for the inexperienced, unless they have a substantial pile of cash that they are willing to risk.

SHOULD THE INEXPERIENCED BUYER TRY TO BUY A FORECLOSURE?

Well, that depends.

If the buyer intends to buy the property to live in as their permanent residence, and have the guidance and assistance of an experienced agent, buying a foreclosure may be worth their investment of time.

However, even under the best of circumstances and preparation, buyers must realize there are many issues associated with buying a foreclosure that can be stressful and result in no purchase.

I've personally been involved in the sale of literally thousands of homes since beginning my career in 1971; many of those transactions involved foreclosed property.

If you contact me, I'd be happy to sit down with you to discuss this topic in greater detail and answer any questions you may have. And, if you're still interested in buying a foreclosed property, I'd be happy to help you.