2) you can home inspect, but if it's been winterized, or the power or water are turned off, then there's no way to completely inspect the electrical and/or plumbing. the bank will almost never turn those back on for you to inspect. also, you should pay extra for an extremely thorough termite inspection. it's worth it, every little ticky-tacky thing on the inspection you can take back to the bank and demand a price reduction for. banks are beauracracies, the guy holding this property may want to lower the price to sell, but can't unless he can justify it. if it's been on the market a year or two, they won't move much on the price in initial negotiations, literally only a percent or two, because somebody in that buracracy already made a determination of its worth, but will move more after an accepted offer if you can justify it.
find out if it flooded. avoid those, even if repaired. check for Chinese drywall. if it has that, you're taking a loss. if it was a meth lab, avoid it. typical home inspections don't check for any of those things.
budget for immediate small repairs, ~$2000. and be capable of paying for or acquiring debt for larger repairs. it you can't absorb a large repair and come out even with buying a non-foreclosure, then the price is too high.
comps are required to be other foreclosures. this can result in a low comp, which limits how much your home loan can be. mine only had a couple nearby foreclosures, so even though they weren't comparable in any other way, they were the comps. i'd try for a contingency based on the loan approval, especially since IMO comps are rigged in MS anyway. make sure it states that all costs rolled into the loan must come in under the approved amount, not just the purchase price. state that that's the only way you can afford it, they will fold.
figure out why it's still on the market. (the one i bought had the absolute worst picture they could have picked to represent it on the web, and while structuraly sound was despeartely in need of cosmetic upgrades, so i could understand why it was still on the market at a rock-bottom price. had to work on the water heater and A/C handler, but not much else, so am set to make a great return on it when we sell.) if it looks great, then there's probably a structural problem. if it's not been on the market long, then the price is probably too high: no one can get a loan approved with the comps. if the price hasn't been lowered a couple times already, it's probably too high.
