The biggest benefit to the buyer is that you can purchase a home for under market value. The majority of the banks do not want to foreclose on home. The process of foreclosing on home is a very expensive hassle and will give them a much less of return than if the borrower had seen the loan through to term. As a result of this, most banks and lenders will want to get rid of their bank foreclosure listings fast, which mean listing the property below market value for a fast sale.
The facts are, people become very upset when their homes are "taken" from them by the banks. When people become very upset, they tend to act with emotion rather than logic. Most people tend become very emotionally attached to their homes. This is especially true if they have put a lot of work into their home. So it's not uncommon for these homeowners to take a lot of things out of the home, even the kitchen sink! Or the home can be left in a complete mess with loads of personal property left behind. The cost to clean all this up can be a real hassle for the new homeowners. However, some people are willing to pay that price because they realize this property can be a diamond in the rough.
In certain states, it is required by law that the seller prepares and provides a Residential Property Disclosure to all potential buyers. This disclosure will itemize areas of the home that may have damage, such as the roof, foundation, etc. Depending on the state and the laws therein, corporately own homes such as bank foreclosure listings may not be required to have an accompanying property disclosure. This may pose as a problem for the potential buyer because the bank is not required to disclose them.
Understanding "As Is"
Most foreclosure homes are sold "as is". What this means is that the owner is not obligated to make any repairs to the property. However, you are entitled to have the home inspected. Most contracts will give you a certain amount of time to have the home inspected. It's a very wise idea to have the home inspected before you decide to purchase it. Think of it as cheap insurance. And as usual, make sure you read and understand all of the documents involved in purchasing a foreclosure listing. It maybe a good idea to involve a lawyer to help you go over the documents.