Many want-to-be real estate investors are seeing the paid infomercials talking about how to get great buys on foreclosures. The questions are numerous, but the primary one should be are they that great of a deal? In some cases, maybe yes. But in many of the cases, they ended up as foreclosures because the homeowners owed more than they were worth and they were unable to sell them.

The other thing to consider is that the previous homeowners might not have had the money to maintain the foreclosures and so they won't be in as good of condition as some of the other homes on the market. Once a house has sat empty for a number of months, without heat and electricity, the humidity levels can cause mold, or extreme cold can cause pipes to break, drywall to warp and trim nails to pop out.

There are a number of problems that vacant houses have and you buy the foreclosures in an "as is" condition, so you inherit them. This can mean that you might be looking at major systems like the heating and air conditioning that need major work, and sometimes, homeowners or vagrants will take anything that isn't cemented down. Since you have to bid on the homes, you need to be sure you get an inspection before you take on headaches you can't afford.

Another thing to consider about foreclosures is the tax liens, mechanics liens, and judgments that might be against the property other than the first mortgage. Some of these things might not be wiped out just because the previous owner filed bankruptcy or let the home get foreclosed on. You might be faced with paying large utility bills that were left owing in order to get them turned back on, for example.

Be sure to investigate foreclosures carefully because if they were that good of a deal, the homeowners could have probably sold the house or worked out a short sale instead of letting it go into foreclosure. You will want to be sure and check as many records as you can, including utility companies and public records at the county courthouse the property is located in. A mechanical inspection can reveal possible problems that could be costly.

Sometimes, you might be better to consider one of the resale homes on the market instead. Chances are that the home has been maintained, unless it is a fixer-upper. Another thing to do is check the CMA or comparative market analysis on homes for sale, whether they are foreclosures or up for resale. Protecting yourself is in order, no matter what home you are purchasing and you need to know market values to see whether you are getting a good deal

Most lenders will have foreclosed homes appraised so that they know the market value for the area. That doesn't necessarily mean that the home is that great of a deal, if it is in need of unseen repairs. Just because the late night infomercial hosts think you can get great deals on foreclosures is no reason for the average person to ignore market conditions and values or other additional risks involved with foreclosed homes.