Foreclosed Sale

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The recent foreclosure crisis has created an opportunity for savvy real estate investors and home buyers. There are many bargains to be found at a foreclosed sale. Distressed homeowners who are behind in their mortgage, sheriff sales and bank REO sales are all places to take advantage of this opportunity, if you know what you're doing.

Where can I find houses foreclosed for sale?

You can usually find houses foreclosed for sale on the internet. You also want to work with a local real estate agent because most lenders list their real estae owned (REO) properties with a real estate broker.

When is the best time to buy a foreclosed home?

There are 3 situations when you can purchase a foreclosed home.
1. Pre-foreclosure: The homeowner is in default on the mortgage. At this stage you can buy the home directly from the owner.

2. Sherriff sale/Foreclosure auction: This is when the county sheriff sells the property to satisfy the debt.

3. REO: If a willing and able buyer is not found t the sheriff sale, the sheriff's deed goes to the lienholder (mortgage company). They will then sell the house as a foreclosed home sale. These homes are usually listed with Realtors.

Why are homes so cheap at a foreclosed sale?

The owner of a foreclosed home is a distressed seller. That distressed seller may be a homeowner who cannot afford the mortgage payments (pre-foreclosure) or a lender that wants to get rid of a non-performing asset so they can make more loans.

How can I participate in a foreclosed sale?

If you want to be a home in pre-foreclosure before it is sold at public auction then you must contact the homeowner. Many of these houses are listed with a Realtor. There are also online databases where you can find contact information for homeowners in distress before they list their house for sale.

You can bid at a sheriffs sale, but that is usually for the most sophisticated buyers. You can find information on how to bidding procedures from the county sheriff's office who is holding the foreclosed sale.

You can also purchase foreclosed houses from the lender through a local real estae agent. When banks wind up with houses after a sheriff sale, they usually list them for sale with an REO Listing Broker.

A foreclosed sale could mean a great bargain if you do your due diligence and pick the right properties. As with all investments there is some risk involved and you will have to be prepared to spend some time and money on researching your investment beforehand.