How can you get a good deal on a foreclosed home?

It is easy to believe that every foreclosed home is priced to sell; however, nothing could be further from the truth. Remember, the bank is doing its best to recover any loss incurred with the past owner.

There are steps you can take to improve your chance of getting a good deal on a foreclosed home. Here are three things to consider:

-- Learn more about the neighborhood. In addition to the price of the home, take the neighborhood into consideration. Are other homes appreciating or depreciating? You only want to consider properties in areas that are "on the rise."

-- Pay with cash. While this is not always possible, it is typically favored by lenders. If you have the ability to pay with cash, the lender may be more inclined to offer a bigger discount.

-- Do your research. Not every foreclosed property is well researched and presented by the lender or agent. For example, a property may make for a good investment, but a lack of photos or details could scare some buyers away. When you do your own research, you could find a diamond in the rough.

When you take these steps into consideration, you have a better chance of getting a good deal on a foreclosed home. With so many of these properties for sale, especially in larger cities, you won't have to look far to find several options.

As you move forward, don't hesitate to consult with others, such as an agent or attorney, to learn more about improving your chance of making a sound decision.

Source: Bankrate, "7 steps to a great foreclosure buy," accessed April. 20, 2015