We are thinking of buying a foreclosed house....

The house where I am staying now is my Aunt's house. This was a foreclosed house they bought. It only cost 120 thousand pesos ( more or less $ 2,926) and the house is far big enough for its price. It has 4 big bedrooms and if this was only normal house sold and not a foreclosed one it might cost more than million pesos or two. My aunt really saved a lot of money buying a foreclosed house.

Check out the neighbourhood well. Visit the area at different times of the day to see what it is like and whether you feel comfortable there. If you can afford it, take a surveyor with you or pay for a report in case there are any problems you might not be able to spot. Talk to the neighbours and see if they know of any problems with there house - has there been any flooding or anything like that. What might be a problem after you have bought the house is that it flags up on credit reference agencies and there may be outstanding debts for that address - not necessarily a charge on the property like a mortgage or secured loan but the previous occupiers may not have informed all their creditors that they aren't there any more. When we bought our house we had some real problems getting utilities connected or any time we tried to open a bank account because the previous occupier ran up some huge debts and then absconded. Most companies are okay if you can explain and prove you are not liable but it can be inconvenient having to produce ID any time you want to hire something or take out a contract with someone.

My daughter bought a foreclosure through HUD this summer. The best advice I can think of is to have some money set aside for repairs and unexpected expenses. If you can do some of the work yourselves, so much the better. She had to replace parts of both bathrooms, put light fixtures in the kitchen, paint everything, pull weeds by the hour, repair window frames and so on. Just last week she pulled up the tile in a downstairs den of sorts because a lot of it was broken and loose. She got a really nice house but it was a lot of work. Some of it didn't have to be done until she had moved in, but part of it had to be done to prove that she could, I guess. Something about HUD rules, anyway. Insurance company had their say about what needed to be done, too. If I were you, I'd take my time in looking and when you find a house that you like, go back and look at it several times to be sure you haven't overlooked anything. It's easy to get carried away with what we want a place to look like and overlook what it really looks like.