Investing in Home Foreclosures

Whether you're a novice or a professional "rehabber," who fixes up foreclosed properties, you'll need to stay on top to come out ahead. We've gathered resources and culled information from varied sources to bring you timely information on Home Foreclosure Prices, and Financing Foreclosure Purchases. Why Buy Foreclosed Homes, you might ask. There are plenty of solid, smart reasons and we'll share them with you, along with buying foreclosed homes tips, and resources on Home Foreclosure Listings.

The mortgage foreclosure process creates three sets of real estate investing opportunities: the "Default/Pre-Foreclosure" phase, the "Auction/Sale" phase and the "REO" phase. Buying Pre-Foreclosure Properties involves working directly with the homeowner and sometimes the lender to create a win-win situation (homeowner makes a sale and you buy the property at substantial discount).

When bidding for Home Foreclosures at legal auctions, you compete against the lender and other investors and the process moves very quickly. Investors can achieve 35% to 45% savings off market values and earn an excellent return on investment. However, it is rarely possible to inspect the property. To be safe, you should have a title search performed, which can be costly. Certified checks for 10% of the purchase amount may be required with the balance due in weeks, days or even hours.

One of the easiest ways to buy foreclosed property is buying REOs ("real estate owned," when the lender takes back the property to gain possession and cut its losses). But the lender is not in the real estate business and is usually motivated to sell the property off quickly. The REO will always have clear title, which saves time, expense, and worries when buying Home Foreclosures. Most likely the lender will also have paid any property taxes in arrears. The lender may either repair the property to acceptable standards or give the buyer a discount to make the repairs. Average savings range from only 5% to 15% off market value with REO Home Foreclosures.