Buyer beware: foreclosure “bargains”

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Good morning. Those of you tempted to become vulture investors and fish around for bargain foreclosure properties are advised to read David Lazarus’ column today, in which he lays out an increasingly common trap: companies that sell you outdated, virtually worthless foreclosure ‘listings.’

Lazarus: ‘A wide variety of smaller services -- try Googling ‘foreclosure listings’ -- has emerged in recent years to connect distressed properties with potential buyers. Almost all involve fees that can run hundreds of dollars.’

Surely some of these services offer a worthwhile product. But many others are selling worthless leads.

My take: If you’re looking for a house to live in, this market isn’t all that different from looking at the market peak two years ago: Once you’ve come to peace with the idea that the value of your home might decline after you buy it, pick a neighborhood or three where you’d like to buy, and shop around, go to open houses, surf the Web. You’ll be able to compare new listings, old listings, reduced listings and foreclosed listings. If you’re a confident, organized, savvy, self-starter, willing to devote some time to your search, you might want to search on your own. Otherwise, work with an agent. But you don’t need to spend any money to look for a house.

If, on the other hand, you’re looking to invest in distressed properties -- you look in the mirror and see The Donald Trump of Foreclosed Properties -- well, good luck to you. Prices are declining in most parts of Southern California, and you’ve chosen a risky time to start buying.

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Photo Credit: AP