When you're ready to buy a home, one thing you might be considering is looking for a foreclosure or short sale. Both homes tend to be at fair market values or lower, making them a potentially great deal. There are some things to know about this kind of transaction, though.
For instance, these homes sometimes sell quickly to those who have cash or funds ready, so you may need to be quick or look at multiple properties to find the one that's right for you. Foreclosures could come with hidden problems that you don't know about; if no one has been living in the home, there's a chance that damage has been done or that repairs are needed that could cost thousands.
Don't ignore problems with the property, because they can be costly. Some people are angry that they're losing their homes in foreclosure, so it's common for them to damage the properties on purpose to take out their anger. Skipping a home inspection is a horrible idea, since you will have no idea what you're getting into. An inspection can bring up some potential issues, and a good specialized inspection can generally tell you if there are problems such as termite damage or damp in the walls.
Remember that if you're after a short sale, the time it takes to get your offer approved could be much longer than you expect with a normal home purchase. Banks that are overwhelmed with short sales or foreclosures can take months to respond and may decline your offer or request a higher bid.
Source: Bankrate, "5 common errors when buying a short-sale house," Lora Shinn, accessed Dec. 14, 2016