5 Steps To Buying A Foreclosure

No. 2: Inspect properties carefully

Assuming you follow Tip No. 1, you can have the home professionally inspected. That's key, because most short sales and REOs are sold "as is," even though their financially strapped former homeowners rarely kept up with the maintenance.

Have a good home inspector go over any foreclosure you're thinking about buying. Then present the seller with a list of all problems and estimates of how much they'll cost to fix, using this rundown as a tool to negotiate a lower price.



No. 3: Set up financing in advance
Many short sales and REOs attract multiple offers, so you should set up financing in advance. Having your financing in order in advance is crucial.

Get preapproved for a loan before looking at properties. You should also check your credit score, fix any credit problems and set aside enough cash for a down payment.