What a great article from Popular Mechanics:

Thinking of Springing for a Foreclosed Home? Check for these 5 Problems First

But, he said, as more home buyers become interested in purchasing a foreclosure, they need to be more mindful of the potential hazards. In the recent study, ASHI also asked homeowners whether they'd forego a home inspection in exchange for a discount, and when the discount got up to half-off, he said, about half of respondents said they'd consider waiving the inspection. Grant said that kind of situation was hypothetical—banks aren't offering those kinds of deals now. But all of our experts said that foregoing an inspection would be a bad move anytime, and would be especially risky when dealing with foreclosures—many are great homes in need of a little bit of help, Grant said, but a few are utter disasters. Here are some of the problems that home inspectors and realtors have found in foreclosed homes. Buyer beware.

Read the whole thing