1. Time. Make sure you've got enough of it to spare.
Buying a property below market value will come at a cost, perhaps other than an immediate cash cost, but it will cost you. The process involved in buying a foreclosure will usually take up to two months of your time before you know you've got the property, while keeping you on the hook and unable to act on any other property in the meantime. Once you've had an accepted offer on a foreclosure property, your deposit gets cashed into a trust account right away. However you won't know you've got the property till approved by court. Times could vary but 4-6 weeks is a standard timeline for a court date to take place after an initial accepted offer. Now the best scenario is there are no competing offers and the new home is yours (allow 3 more weeks for possession). If there are competing offers and you do not wish to bid extremely high or simply did not realize someone would bid so high for this property, you've just lost on this property and will have to wait a few more weeks for the deposit to be returned back to you.
2. No guarantees by seller.
In an ordinary real estate transaction, the seller is responsible to deliver the property in the same condition as originally seen by the buyer. When buying a foreclosure, the seller offers no guarantees whatsoever.
That means the only deliverable on possession date is 4 walls still standing (even if those weren't there the seller would probably successfully argue in court that they carry NO responsibilities whatsoever). So if you get the keys to your new home on possession date and find all the appliances are gone and with granite counter tops ripped out... well, you have no one to go after and bear all the costs yourself.
3. Property has been vacant for too long.
Even if you had an inspection done, your new home likely has not been lived in for quite a while. That means, a small leak, that an inspector has not picked up on, could have originated and gone completely unnoticed since no one lived in there for so long. You'll only discover that small leak if you've been running the water for a long period of time. By then you could be flooding your neighbors. This goes on to say that all homes must be insured on possession date, but foreclosure properties especially!
Remembering these three simple points when buying a foreclosure could lead you towards a very successful purchase of a beautiful home at below market prices!