There are multitudes of homes and commercial properties all over the country that have been foreclosed upon and are now sitting empty. Drive through any neighborhood and chances are you will come across a block that has maybe one or two houses still occupied among a sea of foreclosures and REO properties. If you are looking to take advantage of these great buying opportunities, you need to make sure your investment is solid and this means making sure the house you choose is not overpriced. 

Many of today’s foreclosure and REO properties are in great move-in condition.  It is easy to fall in love with a house whether it is to raise your family, flip or to serve as a rental.  The trouble is, what may seem to be an unbelievably great price, could actually still be overpriced.  It is important to exam all your options before you make a deal on any house and buying REO properties or foreclosure properties are no different. 

How do you tell if you are looking at an overpriced REO or foreclosure property? Well, fortunately, the keys to knowing the right price are similar to buying a conventional home.  The tips for getting to the right price include:

•  Comparing recent home sales in the neighborhood. How long have houses been on the market? Did they sell for what was being asked or did the price drop before it was sold?
•  Checking public records of recent sales and foreclosures. Are there other homes in the process of being foreclosed?
•  A professional appraisal is always a wise move and worth the expense.
•  Drive through the surrounding area. You can tell a lot by how well other homes are being kept.
•  Visit with potential neighbors as you’re in the neighborhood. Ask about the activity in area for the past few years. This will give you signs of what to expect from the market for that area in the future.
•  Make sure you consider things such as all maintenance, warranties, taxes and insurance. Are there Property Owner Association dues?
•  Considering your house payment, utilities and other set monthly expenses, can you afford major expenses that come with owning a home? Repairs that may come about can be costly and unexpected.

With housing prices still all over the place in this country, some areas have started to see recovery in their local economy, while others are still waiting to hit bottom. Regardless of your motivation for buying a property, make sure you check all your information and make an informed price buying decision.  Just because you are willing to pay the asking price doesn’t mean you are getting the best deal on a property.  Make sure that you aren’t paying an inflated price and ask yourself if this property will hold its value so that you can recover your investment.