How to Buy a Foreclosure

Tips on Buying a Foreclosure

1. The first thing you should do is consult all of these resources and places for details on property foreclosures: classified newspaper and magazine advertisements, the Federal Housing Administration, the Department of Housing and Urban Development, and real estate companies in your hometown. All will be able to tell you about recently foreclosed property in your state or hometown.
2. The next thing to do is investigate foreclosure proceedings in your state. Contact your state or local governmental offices for information on the steps needed to take in purchasing foreclosed property. Use this directory of official state, county, and city government websites for contacts: State and Local Government on the Net.
3. Closely INSPECT the property in which you are interested. Keep in mind that most foreclosed property is sold as is, so there could be many things wrong with said property. It might be a good idea to bring along a home repair handyman-he'll surely know what to look for and what to look out for.
4. Go to local real estate agents and ask them if there are any other foreclosed properties in your area of equal or comparable price.
5. You MUST conduct a title search on the property. This will uncover existing liens on the property, and it will also help determine ownership.
6. Call the trustee handling the foreclosure sale and ask about the minimum bid the lender (i.e. the bank) is willing to accept.
7. Have your finances together and figure out just how much money you can put down for the foreclosed property. Once you do that, make a bid at the foreclosure auction (if there is one). You could also turn in a sealed bid to the lender when the foreclosure sale wraps up.

Caution

Know that the easiest way to purchase foreclosed property is from a bank. In most cases banks will settle outstanding debts on the property so they can sell the property with a clear title. Foreclosure auctions are the riskiest way to go, especially for novice buyers. Why? Because in a lot of cases you're not allowed to inspect the property, and you have to come up with the majority of the money for the property in cash format. You also get saddled with all the unpaid property taxes and debts left by the previous owner!

Where to Buy a Foreclosure

• ForeclosureNet.netSign up for a free seven-day trial and search the country for bank and government foreclosed homes.
• Bargain Network: Foreclosed Property Search: Allows users to search a nationwide database of properties that are in default or bank-owned. NeoRealEstate.com

Check out the map of the United States, which will display info on foreclosed properties on whichever state link you click