Good deals on foreclosure properties do exist, agrees Gary Painter, director of research at the Lusk Center for Real Estate at the University of Southern California, Los Angeles. "Then there are other properties that, once you factor in the costs of needed upgrades, are not good deals," he says. "In general, a foreclosed property may need more work than a non-foreclosed property."
That's not to say foreclosed properties are necessarily in bad condition, Painter emphasizes. For instance, some homeowners and building contractors got into subprime mortgages they eventually couldn't afford and ended up in foreclosure. These houses could be in excellent shape, even brand new. "But because these are nice properties," Painter says, "they might not be great deals from a price standpoint."
