Eight mistakes people make buying a foreclosure

The eight

• 1. Skipping the inspection to save $400. The single most expensive economy available to you.
• 2. Assuming as-is is negotiable. It is not. Budget for the repairs or walk away.
• 3. Not checking the title. A cheap property with an unresolvable title problem is not cheap, it is unsellable.
• 4. Forgetting the debts that follow the property: unpaid CRIM tax, HOA fees, utility liens.
• 5. Assuming it is empty. Some properties still have occupants, and removing them becomes your problem and your timeline.
• 6. Budgeting only for the purchase. Repairs, insurance, closing costs and the first months of ownership all cost money.
• 7. Buying remotely without anyone on the ground. Photos do not show humidity, termites or what the street is like at night.
• 8. Falling in love. The property does not know you exist. Set a number, and stop at it.

The pattern underneath them

Seven of those eight are the same mistake: paying for optimism instead of paying for information. An inspection, a title study and an insurance quote together cost a fraction of one bad surprise.

A foreclosure is a good deal precisely because it comes with uncertainty. Buying the information that removes the uncertainty is not an expense — it is the whole strategy.

How to tell a real bargain from a trap

• The discount is explained by condition, not by paperwork. Condition is fixable with money; title problems may not be fixable at all.
• The seller is an institution with clean title, not an individual whose ownership is unclear.
• You can inspect it before committing.
• The repair estimate, added to the price, still leaves you below comparable homes nearby.