A foreclosure can be a devastating experience for homeowners in hot water with their mortgages. For buyers looking for a reduced price on a great property, however, they can be a dream come true. Better yet, foreclosures can make the difference between homeownership and renting for people whose finances put them slightly out of reach of the market.

Foreclosed properties can provide a once in a lifetime opportunity for people in the market to buy; but before anyone thinks about signing the papers, here are a few precautions one should take to avoid being thrown into the same tight spot as the property’s previous owners.

(1) Make sure the property is built to code

Imagine thinking you’ve got the greatest deal one day only to be told the next that your home was not built to code and requires tens of thousands of dollars in repairs. There goes your great deal.

Building Code Inspectors can be called out free of charge to inspect the property before you buy to ensure it is accordance with all relevant codes. This is a simple and free precaution and should never be overlooked.

(2) Assess any additional costs

Is the plumbing working? Are there holes in the wall that need to be patched? Does the home need a paint job?

Whether you are planning on living in the home or reselling it, these repairs need to be done. Make sure their total cost doesn’t make your deal vanish!

(3) Hire a Real Estate Lawyer to look over the foreclosure contract

Contracts finalizing sales of foreclosed properties are notoriously thorny and filled with subtle clauses that might come back to haunt you. Save yourself worry and possible financial hardship by hiring a Real Estate Lawyer to look over your contract.

(4) Keep records of any costs related to the foreclosure

Many(but not all) of the expenses you incur as a result of buying a foreclosed property could be tax deductible. Escrow fees, moving expenses, some repairs, application fees and even your hotel bill before you move in all qualify!

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This is filed under Foreclosures.

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