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A home purchase is an undertaking that leaves even the most experienced asking questions of real estate professionals and home inspectors. Is it a good deal? Is it structurally sound? What about the spots on the ceiling? What about the racket coming from the house next door? This is the reason buyers' agents, title insurance companies, and home warranties have become thriving businesses. In a typical real estate transaction, a good portion of the risks are addressed prior to the sale on common disclosure forms.

Today's housing market includes a vast number of houses that will not be thoroughly inspected and will not have accompanying disclosure forms -- but they will come at a bargain. These are foreclosures. Often, when a homeowner realizes that they are losing their home, they stop taking care of the usual maintenance items:  they stop caring if the lawn dies, the termites move in, or the pipes freeze and break.  In other cases, the homeowner becomes a bit defensive and spiteful at the thought of losing their investment and their family home, and pull out wiring, plumbing, and anything else that can be salvaged for a few bucks or decrease the resale value. Sometimes, the damage isn't so apparent. There may be unforeseen problems that prevent the home from being mortgaged, there may be undisclosed liens against the property, or the bank may drag out the closing process.

Fortunately, purchasing a foreclosure does not have to be all risk and doom. The buyer simply needs to do a bit of homework before taking the leap. The following suggestions can turn a game of Russian Roulette into a practical window of opportunity:

Know where and how to shop. Often, buyers can purchase properties through pre-foreclosure, which means buying the home directly from the owner before the bank takes possession. Other options include purchasing foreclosed properties that are Real Estate Owned (REO) or through foreclosure auctions.

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Once a possibility is identified, hire a real estate lawyer or title company to perform a title search. This course of action reveals any liens or second mortgages that exist on the property, some of which could be inherited by the new owner.

Be aware that properties sold by banks are usually sold "as is." This means that the buyer cannot back out or get his money back if there are structural or environmental problems.

Retain a real estate professional to act as a buyer's agent. These agents check comparable homes in the neighborhood to determine if the asking price is a good deal. Just because it has been foreclosed does not mean that it is a bargain. In the last few years, many were purchasing homes -- and banks were lending -- at prices far above their present value. In today's market, the remaining mortgage balance (and the bank's asking price) may still be more than the home is worth.

Retain an honest real estate professional. Keep in mind that these agents are getting a commission, so it is in their best interest that you commit, and quickly. And, if you pay a higher price, that's even more in their pocket.

Inspect the property -- and bring as many professionals along as possible.

Ask a professional contractor to help determine the costs associated with fixing up the home. Add this cost to the price of the home to make sure that the home is still a good deal.

Know your state's laws relating to foreclosures. In many states, this is a cash-sale process in which the buyer must have the full amount within a week or month, or forfeit the deposit. In other jurisdictions, the buyer may have to evict the previous owners and their belongings. Some states allow foreclosed homeowners to reclaim their property, even after it has been sold at auction. This could mean that you donate expensive renovations and hard work to the previous owner.

Research property taxes. A foreclosure is only a good deal if the buyer can afford to keep the property.

Make sure that you will not be inheriting any unpaid property taxes.

Research unexpected creditors, such as city utility companies. Some utility providers do not shut off utilities because it would present a hazard to children living in the home or sanitation issues for the community. These unpaid utility bills could be rolled into the buyer's property taxes.

Get to know the neighborhood. Learn to ask the right questions. Some neighborhoods have poor construction, soil contamination, excessive sound or environmental pollutants, or unattractive restrictions.

Become familiar with zoning restrictions on the property. The new homeowner may believe the property is a single family home, but come to find out that it has been zoned commercial.

Get to know the local building inspector. You may have intentions of adding a septic tank, only to find that there isn't room for a leach field.

Read and understand all the fine print -- particularly in addenda to the contract. It doesn't matter what you know about traditional real estate transactions, the mortgaging bank calls the shots on a foreclosure sale. All the foreclosure-specific addenda are written by the bank's lawyers to protect the bank -- not the buyer.

While the risks are present, home buyers need not write off foreclosures as being too dangerous. Finding foreclosure deals can be quite rewarding. The market is flush with dream homes at dream prices, but the buyer needs to go in prepared and with eyes wide open. One must be wary that the possibility of owning the dream home -- or flipping that home to someone else's dream -- will take work. If done correctly, the majority of the work will be done prior to the purchase. The buyer can then go into the deal confidently, knowing what they are buying, knowing exactly what they will be spending for it, and knowing what they will come away with when the deal is done.  One can feasibly testify that the greatest risk in investing in a foreclosed property lies squarely in inadequate research. Once the buyer has gone as far has he can go with research, then second -- or even third and fourth - opinions should be obtained. The structure, the environment, the history of the house must all be scrutinized and weighed in the balance.

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