The foreclosure inventory has waned over the last few years and the foreclosure price tags have come up. Where in 2010 or 2011 you could have purchased just about any Real Estate Owned home (foreclosure), it is now a much riskier gambit. This has led many of the talking heads to warn homebuyers of the perils of buying a foreclosure these days, especially here in the greater Detroit area.

And while there is some merit to the advice, I would say that you should think long and hard before writing foreclosures off. Where you once bought a foreclosure for less than it was listed for, most are now selling above the asking price. But they are still asking 40 to 60 cents on the dollar. So even if you pay a little over asking price, you are still getting a house at a very fair price. But you have to be smart, you can’t get locked into a bidding war, and you have to be sure you know the true value of the property.

To help with these steps, many homebuyers consult sites such as Zillow, Trulia, or Homes.com. Unfortunately, these sites give an estimate and are not always very accurate. And in the world of foreclosures, accuracy is key; especially if some work needs to be done. This is where you need to find a qualified mortgage banker or real estate professional to assist you. These individuals have a much better understanding of your local real estate market as well as the available inventory to help you understand what you should bid on a property, what it is worth, and when the bidding has gotten out of control. And with the help of a qualified professional, you can still make great purchases on foreclosures here in Michigan.

If you have any questions about how to search for a foreclosure or about how much house you can afford, please contact me. If you have anything to add about buying a foreclosure in Michigan, please leave a comment.