There are two types of foreclosures: judicial and non-judicial. The difference is that judicial foreclosure requires a lawsuit filed in court, while a non-judicial foreclosure circumvents this process. Although some states allow both procedures, there is usually a dominant foreclosure type in each state.
If you are interested in buying foreclosed homes as investments, this can be a very profitable option. In most cases, someone will buy a foreclosed home, complete any repairs, and sell it quick. People that do this as a business find it to be quite profitable.
Ways To Purchase Foreclosures
Buying Foreclosed Homes at the Auction
When you hear of a house selling on the courthouse steps, this is actually what happens. There will be lenders and investors all outside on the steps bidding on the house. This type of bidding is very intense and the process moves fast. To avoid devastating results, it is necessary that you conduct as much research as possible.
In order to be involved in auction buying, you first need to do the following:
Thoroughly research any properties you are interested in prior to the sale
Keep your options realistic
Weigh out the financial profit if you should win the bid
Decide what your highest bid will be and stick with it
Foreclosures Pros
Savings off market value can be as high as 45%
Outstanding return on investment
Foreclosures Cons
Auctions can be postponed
Seldom are there opportunities to inspect the house before the sale
