Tom Barlow a fellow WalletPop blogger recently called out Flipping foreclosures as overrated and backed up his claim with some daunting information about foreclosures. Well it appears Tom was ahead of the curve, and now Eric Tyson, the real estate expert behind "Home Buying for Dummies" met up with CNN to deliver more advice on just what it means to buy a foreclosure. Perhaps the most important information I got was to be prepared to walk away from a house if the bidding heats up. Unfortunately the buyer's remorse for an overpriced foreclosure is greater than what you felt after dropping 2 grand on a vacuum sealed hotdog from the 2006 Super Bowl!
Even with all the practical advice, the allure of buying a foreclosed home is hard to resist. For every article I read outlining the dangers of buying foreclosures, three or four individuals I know have a story to tell about their brother in law's third cousin who just picked up a fantastic home for half price. Heck last time the cable guy was over he was singing the praises of foreclosures, telling me that his best friend just got a home for a third of its appraised value!
It seems that all my time spent perusing the foreclosure notices will likely be for naught, as both Tom and Eric have pointed out that getting financed for a foreclosure is a feat in and of itself these days, since banks are leery to lend money on these risky properties. Since our credit isn't sitting pretty at 850 and we lack a substantial down payment, I'd be willing to bet banks would steer clear of financing a foreclosure for us. That's alright though; I'd prefer to spend a bit more and have a happy first home ownership experience than to save a bundle and buy a half priced hovel!