How to Buy Foreclosed Property

If you're looking for real estate bargains, consider buying foreclosed property. A foreclosure takes place when a homeowner or property owner cannot pay the mortgage fees on the property and is forced to give up the land to pay back what is owed. Here's an overview of what you'll need to do if you want to buy a foreclosed property.

Instructions

Difficulty: Challenging

1. Locate properties scheduled for foreclosure sales by checking classified newspaper ads for listings under Foreclosure Notices, Auction Sales or Sheriff's Sales.
2. Notify local real estate agents and attorneys that you're interested in purchasing foreclosed properties.
3. 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.
4. Investigate foreclosure proceedings in your state.
5. 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.
6. Determine ownership, identify potential problems and research any existing liens by conducting a title search on the foreclosed property.
7. Contact the trustee of the foreclosure sale to inquire about the minimum bid the lender will accept.
8. Determine how you'll finance the foreclosed property or find out if the current loan is assumable.
9. 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.

Tips & Warnings

• Foreclosure proceedings can be complicated, so be aware of your state's legal procedures for acquiring foreclosed properties.
• Since properties are usually offered "as is" at foreclosure auctions, inspect the property before you make a foreclosure bid to avoid a costly mistake.
• 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.