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HOW TO BUY FORECLOSURE PROPERTIES |
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If you're
looking for real estate bargains, consider buying foreclosed
property. Here's an overview of what you'll need to do. |
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Locate
properties scheduled for foreclosure sales by checking
classified newspaper ads for listings under Foreclosure Notices,
Auction Sales or Sheriff's Sales. |
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Notify local
real estate agents and attorneys that you're interested in
purchasing foreclosed properties. |
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Check with
local lending institutions and government agencies - such as the
Federal Housing Administration, Veterans Administration or
Department of Housing and Urban Development - about foreclosed
properties in your area. |
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Investigate
foreclosure proceedings in your state. |
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Inspect the
foreclosed property to determine its condition and market value;
obtain sales prices of comparable properties in the area from a
local real estate agent. |
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Determine
ownership, identify potential problems and research any existing
liens by conducting a title search on the foreclosed property. |
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Contact the
trustee of the foreclosure sale to inquire about the minimum bid
the lender will accept. |
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Determine how
you'll finance the foreclosed property or find out if the
current loan is assumable |
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Make an offer
on the foreclosed property by bidding at the foreclosure auction
or submitting a sealed bid to a lender after the foreclosure
sale. |
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Foreclosure
proceedings can be complicated, so be aware of your state's
legal procedures for acquiring foreclosed properties. |
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Since
properties are usually offered "as is" at foreclosure auctions,
inspect the property before you make a foreclosure bid to avoid
a costly mistake. |
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Depending on
the reason for the foreclosure sale, there may be a redemption
period in which the previous owners can make payment in full and
get their property back. Check with the trustee to protect your
rights |
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When you buy a
foreclosed home, you're cashing in on a home someone was no
longer able to pay for. Foreclosures are difficult--both to
locate and to execute the transactions--but the potential to
turn them over for a tidy profit may be there. |
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Search for
foreclosure listings in real estate magazines, newsletters,
newspapers and Internet search engines. Call lenders for real
estate owned (REO) properties lists of foreclosures. Government
agencies such as Fannie Mae (fanniemae.com) and the Department
of Housing and Urban Development (hud.gov) also advertise
foreclosed homes for sale. Check public records for other leads.
A lender deciding to foreclose must file a notice of default in
the local county clerk's office. |
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Find out how
foreclosure works in your state. Procedures and legal
requirements differ, so get a sense of how soon you can go after
a home that appeals to you. |
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HUD and other
agencies often auction foreclosed homes. However, buyers are
frequently unable to inspect any property before making an
offer. With so little information, the higher the bid for the
property, the higher the risk that you may end up with a money
pit. See How to Buy a House at Auction. |
