A foreclosure is a home that someone else had to give up because they were no longer able to make their monthly payments to the mortgage company. When the home owner is unable to pay the mortgage the bank can evict them and take the property back.
Because the lender is losing out on their investment they often offer the property at a reduced rate or discount because they are trying to recover their investment as quickly as possible. Foreclosed homes are often difficult to find and purchase, but if you do find a foreclosed home it could wind up being one of the better deals in the neighborhood.
There are several ways that you can go about finding a foreclosed home. First, choose the area where you would like to find a home. When you have found a few neighborhoods that you are interested in you can search websites like foreclosuretech.com and others that offer lists of foreclosed homes in your chosen area.
Another good place to look for foreclosed homes is through local lenders. When a lender takes back a home it is called an REO, which stands for “Real Estate Owned Property”. They keep lists of their REO’s often times on their corporate website, you can also contact them over the phone and/or through a dedicated realtor. They should be able to let you know what agent handles their properties if that information is not listed on their website.
When you find a home that you like it is important to physically check out the home because the condition could be much worse than advertised. After inspecting the home make sure any needed repairs plus the cost of the home itself does not end up totaling more than the cost of a comparable non-foreclosed home. If the home is in good shape without needing major repair and it’s being offered at a lower foreclosed price you may be able to save quite a bit of cash.