For most people buying a home will serve as their largest investment. Financial motivations aside, buying a home can have many emotional benefits as well. Foreclosures are often just like any other home, but they are often $10-20,000 cheaper. Purchasing a foreclosure will save you some money, but it will also come with some costs. For some home buyers these costs will be greater than they need to be. Some buyers will fall victim to at least a few of these common and costly mistakes:

Overspending on the home they want, or

Losing their dream home to a more prepared buyer or,

(worse yet) buying a home that doesn’t meet their needs.

Fortunately with a little thought and preparation you’ll be able to steer clear of these common pitfalls, cut costs, and secure a home that meets your needs. There are 6 very common and costly home buyer pitfalls and I’m going to show you how to avoid them. The six foreclosure buyer pitfalls are:

1. Bidding Blind. How much should you offer the seller for their home? To answer this question you’ll need to first determine if the asking price is too high or if it’s already a great deal. Even in the toughest markets underpriced homes will see multiple offers. But you also don’t want to over pay either, so you must do some research. Certain websites or an experienced Realtor can provide you with a list of recent area home sales. The key is to know what homes are selling for. Try to avoid using active listings as comparables. There is an epidemic of people listing homes for sale that they actually don’t have the authority to sell at that price. These homes have a 1 in 4 chance of closing and because of this they are priced unrealistically low. By studying recent home sales, you can get a more realistic number.

2. Buying the Wrong Home. What requirements do you have for your next home? This is a seemingly simple question that can provide a very complex set of answers. Its not unheard of to hear of a homeowner who’s purchased a home that doesn’t exactly meet their needs. People see a home with all the cosmetic features they want and a price that can’t be beat, and they sometimes overlook their more basic needs. Take some time to create a list of your wants and needs; keep this list by your side as you search for a home. Treat this list like a yardstick that you will use to measure all homes.

3. Unclear Title. Nobody likes last minute surprises. Especially when those surprises can cost you your dream home. Perform a title search early on in the transaction to be sure your home is free from undisclosed owners, leases, easements, or tax liens. In many areas Sellers will pay for all of some of this expense, but this is usually not the case with foreclosures so plan accordingly.

4. Not Getting Mortgage Preapproval. Getting preapproval is fast, easy and free. This is more important than ever in today’s housing market. If you’ve begun your search already then you know that Bank Owned Properties, and Government Foreclosure are the best deals available right now. These types of Sellers require a preapproval letter to even consider your offer. They all do. And don’t kid yourself. Everybody is looking at the same list of homes that you are. They too will know that this foreclosure is just like the other homes on the block, only $20K cheaper. If the other buyers are preapproved and you’re not, they get the house and you don’t; it’s that simple.

5. Contract Misses. The Government and Banks are overwhelmed with sheer volume of foreclosures they have to deal with. And unfortunately one of the things they do to save time is to kick back incomplete or imperfect offers. Miss and initial, or don’t sign in blue ink on a HUD home, and the deal is lost. Choose a Realtor with foreclosure experience, and be sure to check every line of your purchase agreement for missing initials, un-dotted I’s and uncrossed T’s.

6. Undisclosed Fix-ups. You’re more likely to see this with a foreclosure than you are with other properties. The Sellers of these types of homes were not living in the home, and thus they do not know if repairs were done properly, or if it was done with a permit. Certain areas of repair and remodel require a permit, and inspection. If work has been done in your home without a permit, you could be required to have this work redone with a permit and then inspected. This can be costly, and these homes are sold as-is so these repairs, permits, and inspections would be at your expense. Some jurisdictions can require you to have the work completed before you could even move in. A simple home inspection can help you avoid all of this. If the inspector finds that work has been done, check with the county to see if a permit was recorded. Not all work requires a permit, so be sure to check with your home inspector before you start sifting through public records.

To assure a pain-free transaction, take just a few minutes upfront and do a little planning. Create a list of your needs and wants and research recent home sales. Find a local lender and get pre-approved. Triple check your purchase agreement for errors, conduct a title search early on, and for your protection get a home inspection. Foreclosures are a little bit more work, but will often save you tens of thousands of dollars. A Realtor with Foreclosure experience will work wonder to simplify this often complicated process, and they’ll probably do it for free.

Nick Bert is the President and CEO of Washington Realty Source, and he specializes in helping First Time Buyers and Investors quickly and easily locate the hottest deals on Snohomish County Foreclosures. You wont want to miss the Edmonds Foreclosures List which features un heard of deals on some of the hottest properties in Edmonds, WA.