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Step 1
Do your research. In order to get the best deal on a foreclosure home, you'll need to know the average price range for similar homes in the area. Look at regular and foreclosure listings to get a good grasp on fair pricing.
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Step 2
Explore foreclosure listings until you find a foreclosure home you are interested in. You can find free foreclosure listings at any the U.S. Government's HUD site as well as at the Fannie and Freddie Mac sites. Foreclosure.com is another great resource for listings.
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Step 3
Figure out what the home is worth. Use the real estate pricing data you found in Step 1 to calculate a base price. Be sure to include the cost of any repairs or renovations the home may need. If you buy a foreclosure home for 30% below market value, but it needs to be completely renovated before you can safely live there, it may not be the best deal. Juggle the numbers to figure out a fair price.
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Step 4
Approach the lender of the foreclosure home and ask about buying the property. Buying from the bank or lender is the safest way for an inexperienced buyer to purchase a foreclosure. The lender will often help make the process smooth and easy, and will reveal any liens or taxes on the property without you having to do substantial research.
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Step 5
Make an offer on the home. Many lenders, who are faced with an overwhelming supply of foreclosure houses, will be willing to make a great deal with buyers. They may cut the price, eliminate closing costs, or offer low-interest loans for those willing to buy a foreclosure home.
