How to Buy Foreclosures

How to Buy Foreclosures

Purchasing foreclosure properties works just a little bit different from a traditional real estate deal. Once you learn how to buy foreclosures, you will find that's it's not difficult, but that it does take a little more work on your part.
There are basically three ways to buy foreclosure property: 1. Default/Preforeclosure state. 2. Auction/sale state. 3. REO or bank owned state.

With default or pre-foreclosures, you typically deal with the homeowner--sometimes with the lender. You goal is to convince the homeowner that this deal is in their best interest. Finding pre-foreclosure properties can be done by subscribing to a foreclosure listing service where you will receive updates on homes in pre-foreclosure, banks and/or real estate attorneys can also provide this information. If you can work a deal, you will probably walk away with a smile on your face.

Buying at an auction can be rewarding, but it can also be frustrating. There is usually stiff competition, and you have to be able to make a split section decision to bid higher or let a deal go. Buying at auctions can get you great homes at a significant discount, but many times, you don't really know what you're getting into because you do not have access into the home for an inspection.

One of the easiest ways to buy foreclosed property is from the lender (REO). In many cases, the lender may be willing to wipe out liens and all property taxes. The lender may also make necessary repairs to the property or offer a discount to the buyer.

The steps for buying a foreclosure are simple: You are notified of the foreclosure, determine the value of the property, and more forward from there. Of course, there is more involved depending on the method of purchasing you take, but knowing how to buy foreclosures is half the battle.