Buying foreclosure property may give you great discounts; however, there are various underlying risks to it too.

Benefits

Pre-foreclosure home owners want to sell their houses in a hurry to avoid foreclosure, which gives buyers the advantage to purchase at a lower price. Banks are also looking to sell these foreclosed houses in a hurry and in a cheaper price, because the longer they keep these houses the more it costs them to pay taxes. Houses being sold in a hurry give you the power to bargain at a lower price.
Foreclosure houses these days won’t be sold at a very steep discount price due to the mortgage crisis, and the potential for a bargain is still there.
Buyers can purchase foreclosed home cheaper and with just a few repairs and upgrades, they can appreciate the value of the property.
If you buy a real estate owned (REO) foreclosed properties, the title of the house can be cleared and you don’t have to assume back taxes of liens.

Risks

Yes, foreclosed houses can give you significant discounts, but there will be steep competition too. There are also other pre-foreclosure homeowners who want to pay off their taxes, mortgages and other balances, making them sell the house at an even higher price. Foreclosure houses might give you liens from balance that wasn’t paid off by the previous owner.
If you are planning to buy a foreclosed house at an auction, you may have to pay in cash and there is a possibility that you won’t be able to inspect the house before you buy it, which can be very risky.
Foreclosure houses might need extensive repair, because the previous owner may not have the funds to get it fixed. There are also instances when buyers have to start eviction process to get the previous owners out of the house, and this may costs legal fees. Buying foreclosed house from a lender may not only be time-consuming, but it involves a process filled with red tape.

Related Posts
How a real estate attorney can help you during your home purchase
There are different kinds of real estate transactions such as commercial leases, residential rentals, single-family home, and investment property transactions. To make sure that your real estate transactions run smoothly, ...
READ MORE
What to do when your landlord harassed or threatened you
Several forms of harassment could occur between a tenant and the landlord. Most of the time, it's the landlord who gets the upper hand because he is the owner of ...
READ MORE
Why Should a Landlord Hire a Lawyer?
If you have some real estate properties on rent, you may not need a staff lawyer, but it would be best to consult a lawyer constantly. Just like any other ...
READ MORE
House Buyers: What should a property attorney do for you
The exercise place of residence and residence law deals with a variety of relevant problems, including the following: privileges and interests in residence and actual property; sales, buys and other exchanges of ...
READ MORE
Landlord and Tenants: Roles and responsibilities
In this article, I am going to examine the nuts and bolts of duties and responsibilities of landlord and tenants which come under the landlord-tenant law in the United States. ...
READ MORE
Why buy investment property under an LLC
An LLC or a limited liability company will benefit you in many ways if you decide to buy real estate properties. That's because it will provide plenty of protection in ...
READ MORE
Can legal drugs cause DUI DWI arrest?
DUI DWI arrests are usually due to the use of alcohol as well as illegal drugs. Not everybody knows that legal drugs, prescription medicines and other over the counter drugs can ...
READ MORE
Discuss major real estate laws in the U.S.
Real estate laws has a broad legal area coverage regulated by state law, federal law, and common law. This law includes land and any immovable structures attached to that land ...
READ MORE
Defenses: Most often raised to drunk driving charges?
Drunk Driving is the act where in the driver drives the vehicle under the influence of alcohol or drugs. This is to such an extent that the person does not ...
READ MORE
Difference Between DUI and DWI?
Within the field of regulation, there's much concentration on DUI and DWI prosecutions. With the amazing data for both in Texas, it is incredibly essential to become informed on the ...
READ MORE
How a real estate attorney can help you
Legal aid in landlord harassment
Why Should a Landlord Hire a Lawyer?
House Buyers: What should a property attorney do
Landlord and Tenants: Roles and responsibilities
Why buy investment property under an LLC
Can legal drugs cause DUI DWI arrest?
Discuss major real estate laws in the U.S.
Defenses: Most often raised to drunk driving charges?
Difference Between DUI and DWI?