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By Jeremy Glaser | 08-31-2009 09:52 AM

Should You Buy a Foreclosed Home?

President of the Chicago Association of Realtors Dave Hanna says buyers must have their ducks in a row before jumping into the foreclosure market.

Jeremy Glaser: I am Jeremy Glaser with Morningstar. Even as data suggests that the housing market has reached a bottom and appears to be stabilizing, foreclosure activity has been accelerating. Here to discuss if individuals should look at foreclosed properties is Dave Hanna, president of the Chicago Association of Realtors and Managing Partner of Source One Realty. Dave, thanks for joining me.

David Hanna: Morning, Jeremy.

Glaser: In general, do you think that most individual investors or individuals should be looking at foreclosed properties as a potential home or as a rental property?

Hanna: I think that there's some great opportunities for individuals who have a specific game plan and understand the foreclosure process. These properties are currently quite abundant in some areas of our marketplace [in Chicago], and I think around the country.

However, condition is an issue and understanding the process would be really critical. The one thing that is most challenging for anyone who's looking at foreclosed property, is making sure they have all their financial ducks in a row before they enter into that marketplace.

Banks expect a quick response, they negotiate differently than the average homeowner would and you need to be prepared for how the process is going to go.

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