How to Buy a Foreclosed Home | Foreclosure.com

Buying a foreclosed home can save a future homeowner a significant amount of money on the final sale price. Why? Because most foreclosed homes are listed less than current market value so that they sell as quickly as possible. In fact, it's common to find foreclosed homes for sale for as much as 50 percent off!

There are several reasons, however, for these deep price cuts, including too much inventory and lack of infrastructure and/or resources to market homes effectively. Indeed, banks are in the money-lending -- not real estate -- business. So, in most cases, once banks repossess homes with mortgages in default, they are eager to sell them as quickly as possible and often in "as-is" condition. Banks aren't about to sink more money into bad investments, which is the reason foreclosed homes -- also known as Real Estate-Owned (REO) properties within the banking/lending industries -- are typically discounted.

Most homes in default enter a public auction and are sold to the highest bidders; however, there are usually reserve prices. If the bids do not meet or exceed the reserve prices, the lender will take possession and classify it as an REO. Once a foreclosed home is reclaimed, a bank will typically assign it to a real estate agent (or REO company) to "preserve" the property and then list it in the Multiple Listing Service (MLS). In addition, banks such as Bank of America, Wells Fargo and Chase, among others, list their REOs on their respective websites.

Government Sponsored Enterprises (GSEs) such as Fannie Mae and Freddie Mac have also set up their own websites that lists their foreclosure/REO properties for sale. Therefore, if you're interested in a foreclosed home in your area, the first step is to find out which bank/lender secured the financial note. This can be done easily online or you can pay for a title search to determine the owner.

The great thing about buying a foreclosed and/or REO home direct from a bank is that it will also typically set you up with competitive financing options. However, always remember that when buying a foreclosed home from a bank that cash and/or a downpayment will play a major role in getting a deal done quick. Banks, remember, want to recoup as much money as possible as quickly as possible.

They are already taking a hit on the sale price, so lending more money on a returned asset is far from ideal. The more cash you can bring to the negotiating table, the better your chances are of landing a great price on a foreclosed home for sale. Good luck!

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[sr]

i bought a foreclosed home but i don't know what the next steps are, I was not told what forms i needed to complete the process. I bought the home at an auction in Kane County. What forms are needed after the auction, are all counties the same?

[taraskobets]

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[StopForeclosure]

This is very interesting video. Great advice o how to buy foreclosed home.