Perhaps the only people who stand to gain from the foreclosure crisis are the buyers of foreclosed homes.
But if you think you might find a bargain that way, think again, experts caution. Buying a foreclosed home comes with significant risks.
For one thing, the house may have suffered from lack of maintenance, said Jim Camp of Cutler Real Estate.
"If they [the previous owners] didn't have the money to make the payment, they didn't have the money to fix the garage," he said.
In many cases, particularly when homes are auctioned at sheriff's sales, bidders don't even have the opportunity to get inside the house beforehand. Tax records can tell you a little bit about the house, such as its age, some features and its value, but that information is limited, said Cynthia Sich, director of the Summit County Office of Consumer Affairs.
"You've got to be very, very careful when you're buying a foreclosed home," Sich said. "You don't get to do an inspection; you don't get to go inside. You don't know what you're buying."
What's more, because an asset manager is in charge of the foreclosed home, the buyer needs to be prepared for a much slower negotiation and the possibility that another offer could be accepted, Camp said.
If you do want to buy a foreclosed home, the Better Business Bureau recommends conducting a title search of the property to find out whether it has a second mortgage or lien against it. If it does, you may be responsible for paying off those obligations.
Find a real-estate agent who is experienced in foreclosures, the BBB recommends, and have the agent check the values of nearby or comparable homes to see whether the asking price is really a bargain.
For all but the most sophisticated first-time buyers, Camp said, buying a foreclosed home isn't something he would recommend.
Sich agreed. ''You may get a great deal,'' she said, ''but you could be buying a major headache.''
