According to Zillow, there are roughly 3,000 homes which are foreclosed or in pre-foreclosure. This high number, caused by years of financial hardship across markets and specifically in Arizona’s real estate market, give potential buyers a lot of options and a lot of power. Banks need buyers, and that can only work in the favor of future homeowners.

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These Phoenix area homes, which vary from mansions on beautiful acreage to small cottages on city lots, offer buyers endless possibilities for a new family home or a great investment. Potential buyers have their pick of bank-owned homes ranging in price from under $20,000 all the way up to $1,000,000.

Home buyers looking to move-in right away, or those seeking their own turn-key property are likely not the right buyers for homes in foreclosure. Even in great neighborhoods, buyers should expect to put a little work into any foreclosure. Remember, that little bit of work can get homeowners great value later on.

For future homeowners, especially first-time buyers, considering a foreclosed property can be a risky, but exciting move. For most foreclosures in Phoenix, potential buyers are looking at properties that have not been vacant for too long and are often still surrounded by good homes with solid property value. This gives potential buyers the opportunity to pounce on properties in great neighborhoods, with the chance to grow worth exponentially.

There are risks, though. Let’s be clear. Foreclosed properties often don't and can't have the same kind of guarantees and perks that buyers may find with more expensive, citizen-owned homes.

Rules for Buying a Foreclosure

• Never, Never, Never Skip the Inspection
  In fact, pay for two inspections when you can. Foreclosures are often left vacant for at least some time
• Pick Your Neighborhood Wisely
  To get the most out of your buy, make sure you choose a neighborhood with good schools, solid property values, and all the amenities you and your family want and need in a home. You always remodel a house, but neighborhoods are far harder to change.
• Budget for Repairs
  There are far fewer guarantees provided to homebuyers when purchasing a bank-owned home. Often, these come “as is” and will require a little more work.
• Expect the Unexpected (and Budget Accordingly)
  Be ready to make an investment in time and money.