Congratulations. You have been pre-approved for a loan and you found the house of your dreams. It's a foreclosure and you got it for a steal. The purchase contract has been ratified and your ready to close and move in 30 days... or are you?

From a buyers prospective you have done all the work upfront and you're ready to start packing. However, there are many things to look out for that can make the transaction a nightmare for you. Here are a few things to think about before making an offer on or even considering buying a foreclosed property.

Most foreclosed properties that are vacant do not allow access into the house before you purchase it, so be prepared to buy "as is." Try to look into the windows if no access is allowed or speak to neighbors who have seen the house recently. Foreclosed properties can have tens of thosuands of dollars of damage or missing itmes that were taken in the dead of night before the old owners moved out. You are responsible for all of this when you buy a foreclosed home. The lender will not cover any repair or replacement costs.

Look for any occupants on the property when buying. If the house was a rental and the renters are still living there, you will be responsible for getting an order of eviction, which could take months after you close. If the owners or renters are still in the home and can prove they have filed for bankruptcy, they can stay for months after you purchase the loan until the BK court filings are complete and an order to evict is filed.

Lastly, if the interior has damages of any kind that affect the appraised value such as electircal, roof, foundation, etc., the appraiser will put a cost to cure, or amount needed to fix everything. The lender will deduct this from the purchase price and only lend to you the value of the home less repair cost.

For example, you're buying a $200,000 home and putting 20% down for a $160,000 loan. It's appraised for $200,000 but the appraiser notes $30,000 in repairs is needed. You can only get 80% of the $170,000 or $136,000, requiring you to make up the difference of $24,000 cash to close.

Remember, just because a house was worth $500,000 at one time and you can get it for $200,000 does not mean it will ever be worth more than $200,000 again. That is a lesson we have all learned over the last two years. A home is a great place to raise a family and be part of a community. It should not be used as an ATM machine or a means to put your retirement in the housing market.