Are Foreclosures Worth The Risk? ( 2 )

The Risky World Of Auctions
The best advice for those pondering auctions as a way to get in on
foreclosed property is to simple not get involved at all. The risks
are immense when dealing with a bank-run auction as you will most
likely not have seen the house, have no way to protect yourself
against title problems should they exist and must pay in cash.

That collection of traits discourages most investors and rightfully
so. There is simply too much uncertainty when dealing with auctions to
know for sure that the low sticker price is necessarily worth the
hassle of going through title clean up issues and scraping together
the cash for a purchase.

Foreclosed Homes
As the final step on a bank's path of foreclosure, the home is put up
for sale on the real estate market, though often for at least close to
its market value. Because a home has traveled through a variety of
steps and banks are in no hurry to lose money on any loan, savings are
often slim on foreclosed properties that make it to this step.

However, there are certainly positives. Most likely there will be at
least some kind of discount off of the market price of a property,
albeit slim and deals are much easier to put together. Real estate
transactions more closely follow the format of common real estate
transactions and offer similar protections.

So, as you go through the process of deciding to get involved with
foreclosed property, make an effort to decide which step of the
process you want to target. There are opportunities all along the path
of foreclosed properties, but each step has its own pros and cons that
must be weighed against potential benefits. Having a clear plan will
save you headaches later as you complete the purchase.