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Do a search on foreclosure and you find several other threads on TFP re: foreclosure properties.
Foreclosure properties are not for the faint of heart or pocketbook. As NoSoup has stated there are almost always physical problems with the properties. A lot of times people have sabotaged the properties because they are being thrown out. Unseen or unforeseen damage is the rule of the day.
The rules regarding foreclosure vary from state to state. Any research you do needs to specific to the state where you intend to buy. Some of the caveats:
A mortgage lein is not superior to a federal tax lein so do your research carefully to make sure the IRS does not have a levy on the property.
After the sale on the courthouse steps and the ten days you have to pay the rest of the money, the documents sit on a judges desk. The 'foreclosee' has the right to come in and pay off the forecloser during that time period. So essentially you do not have a deal until the ten days are up and the judge signs the papers. You will find it next to impossible to get a title insurer to write you a title insurance policy under these conditions. No title insurance means no loan. You need to be able to pay cash.
All the normal time frames mean nothing. Appraisal, not hardly. No survey, too bad. Termite inspection, nope.
OK, so how is it that you hear about all these great foreclosure deals. The answer is you buy it from the lender after they have foreclosed and have cleared up the title issues and can deliver clear title to a purchaser. The forecloser (bank, typically) will have inspected the property. They generally do not fix anything but you will at least be able to inspect for yourself. The bank may offer some kind of financing concessions.
They will have obtained a survey and a pest inspection. They almost always list these properties with a Realtor and your best bet is to find a broker who specializes in foreclosures and go talk to him.
Most of the time the lenders are owed more than the value of the property and therefore will have obtained a new appraisal based on the current condition of the property. They will not tell you what the appraisal number is but the listing price is usually within 10% of the appraised value. The bank is not trying to make money they just want to recoup their losses.
My best advice is to take a real estate attorney to lunch and talk it over with him. He will explain the state specific rules and can probably give you the names of a couple of Realtors who do foreclosures.
Good Luck.
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