Are you sold on the idea of buying a foreclosure? Not so fast. Proceed with caution because there's potentially a cost to that low price: a damaged house.
David Richardson, an inspector in the Detroit area who's certified by the American Society of Home Inspectors, says he has seen his share of ransacked homes. As a buyer, you could encounter scarred walls, carpets or appliances that were damaged by the former owner, he says.
Sometimes, time and neglect are the culprits. Turned-off utilities coupled with the house sitting empty for months can do a good share of harm.
However, he says, some foreclosures are "immaculate." And if you scope out a property that's run down, there's still hope.
"If a person is handy, and you have a high tolerance for defects and you can fix this stuff, there are just a ton of opportunities out there," Richardson says.
But in some foreclosures, the condition of the home may be the least of your worries.
If you buy a foreclosure at auction sans research, you won't get to take a peek to see if the plumbing works, if the walls are cracked -- or if there's a lien against the property. You'll be responsible for these cosmetic and legal issues, so many investors research the property's history before the auction. Usually, savvy investors take on these types of sales.