1) Obtain a Home Inspection – The house may look great on the surface but might have hidden problems which could require expensive repairs. On the other hand, a fixer may look bad but could have excellent bones that can be repaired at a reasonable cost. Even if the listing agent has previous inspections and reports that may be a few months old, you may want to still consider having a new inspection as a sitting home can deteriorate a bit.
2) Use Common Real Estate Logic – Too many people focus on price alone. You need to keep in mind sub-par locations, poor lighting, terrible views, below average school district, high crime rates and other negatives that may be another reason why a home went into foreclosure. You should always try to find out how long the home has been empty; the longer it has, the more of chance it may not be a good deal. Also, if there are other foreclosures nearby, that may be a reason for concern.
3) Rethink or Skip the Flip – Even if the house looks like a great flipping opportunity, beware unless you are a pro, with incredible contractor connections. You may want to triple the amount you think you will be spending to fix up the home. Sometimes the temptation to make fast money doesn’t always pan out, so think it through and speak to a real estate professional and contractors.
4) Go over the Budget – A fixer-upper means nothing if you can’t afford to fix it up. Make sure you have an ample budget to do all of the repairs needed.
5) See the house in person – You should never buy a house without going in person to see it.