Saturday, February 2, 2008

Buying a foreclosed home?

I found some good advice in Foreclosure 'bargains' may be costly to the unwary from today's Indianapolis Star:

A fast-growing crop of businesses offers to sell lists of bank-owned homes. One of the best known is RealtyTrac, which charges $50 per month (after a seven-day trial) for access to its database of more than 650,000 properties in (or near) foreclosure nationwide.

But you don't need to pay for such leads. Banks typically hire real estate agents to put their properties in the multiple listing service. That means any agent who belongs to that MLS can search at no charge for properties that are coded as a foreclosure, pre-foreclosure (as noted by the seller) or a short sale in which the bank agrees to accept less than the full mortgage amount owed.

If you plan to make an offer on a foreclosed property, insist on a professional inspection.

Also, don't buy a foreclosed home without taking the optional title insurance. That would protect your investment if old liens appear after closing.
Except I never think title insurance should be optional.