Buying Foreclosed Properties Articles | Foreclosure

By: Guy Starbuck

The statistics for foreclosure show that one in every 111 homes will face foreclosure next year. This means that for those bargain hunters seeking to tap in or a deal or two, are in for a great time with foreclosure deals. Even people who don't want to make real estate investments and who are simply looking for a home can make use of foreclosures to tap into a deal.

Different states have their own particular guidelines on foreclosure and a number of other different regulations. Anyone interested should make sure that they have thoroughly researched the rules in their particular states rather carefully before they decide on purchasing foreclosed property. In some states previous owners may be given as much as an 18 month redemption period which will allow them buy back their property which has been sold at an auction. While the person who buys the said property at the auction can recoup their money, it may be quite disconcerting having to leave a home which you have just started getting used to.

Luckily this practice isn't that common and a huge number of homes which have been repossessed are usually sold off and transferred immediately to the highest bidder.

If you're looking to buy foreclosed properties, three basic options are available for you to take advantage of:

Contacting lenders personally.

Due to the high increase in foreclosure rates nationwide, a large number of mortgage lenders have started the practice of using in-house staff to handle various sales and transactions so that they can get the best financial benefit. You should check out a few major lenders in your area and see whether they list the properties that they have for foreclosure on their own. If they do, get a list and start checking them out. You should keep the fact in mind that when foreclosed properties are bought directly from lenders; you tend to pay more than you would pay at an auction. However, depending on the amount owed on the mortgage you may be able to walk away with up to 50% in instant equity.

Using Foreclosure Realtor.

Many realtors are specializing in foreclosure properties these days. This enables them to work with lenders and put the property on the market as soon as repossession has occurred. Again, buyers pay a little more, but since this process works much like buying a regular home from a realtor, it takes some of the risk away of losing the home during bidding or buying a home sight unseen and un-inspected. Although still sold as-is, many realtors will walk potential buyers through the property and allow inspections before an offer is made.

Bidding at Auction.

The most regular way to purchase foreclosed property is by bidding at auctions. A lot of auctions tend to be rather fast paced and will not allow a pre-auction walk through of the property to be bid on. Such practices may be risky for buyers. However, the potential that you have to purchase property for a small fraction of its real value makes it a very welcome way to make real estate investments. Such auctions usually start bidding at the exact amount owed on the property. Some states may allow bidding below this amount however.