How To Buy A Foreclosure

October 07, 2009

When first stepping in to the real estate market, it is important to know how to buy a foreclosed home or piece of real estate, as it is a different process than that of an ordinary transaction.

Before purchasing a foreclosed home, one needs to know what type of property he/she is looking for. The term “foreclosure home” is actually quite vague, and can be used in reference to properties in various situations, or various stages of the foreclosure process.

During the pre-foreclosure process, the owner needs to be contacted, whether directly or through an agent. At this point a last minute a last minute deal may be made with the current home owner, before the property actually goes into foreclosure.

Once in foreclosure, and offer may be made to the bank. The offer amount is usually somewhere below the market value but above the total outstanding debts. If selling at auction, the property will be sold to the person who has the winning bid, and the highest bidder will usually be required to pay in cash in the form of a cashier’s check at the auction.

For first time buyers, finding a good real estate agent may help to reduce headaches in this process. A real estate agent may direct the home buyer to a bank that will offer good financing, as well as good financial advice.

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