If you scan real estate websites, you’ve likely noticed homes listed as foreclosures or bank-owned properties. Some of the prices might look good, but buying and financing a foreclosed home isn’t a cakewalk.
A foreclosure is a home a lender or lienholder has taken from a borrower who has not made payments for a period of time. The lender or lienholder hopes to sell the property for close to what is owed on the mortgage.
Foreclosure processes differ by state. The main difference is whether the state generally uses a judicial or nonjudicial foreclosure process. A judicial foreclosure may require an order from a judge.
Buying foreclosed homes at an auction or through a lender are the prime ways to purchase these homes. Keep in mind that a foreclosure is usually an “as-is” deal.
It’s a good idea not to go with just any agent, even if you like them and have used their services for a standard home purchase, but to find an agent who specializes in foreclosure sales.