What a great question. To buy a true foreclosure at auction you need cash. That’s the short of it. There are some portfolio lenders out there that you may be able to use their money to buy at the auction however for the most part you will need cash or a cashiers check. Since most of us don’t have these types of funds readily available how else can you buy a foreclosure? You can buy a short sale. A short sale is the purchasing of a home that is in pre-foreclosure. The lien holders, all of them must, agree; to accept less than what is owed on the property It can take time, patience and effort however you can get a very good deal. Again, find someone who has done this before and can explain some of the pitfalls along the way. Start with a realtor. Find an office that has done this before. Keep in mind that as the buyer you are not doing anyone a favor. If the owner could keep their home they would. The bank doesn’t want to own real estate however they will make a business decision as to what they may want to accept or not accept based on the type of loan and amount owed to them. There may be hoops to jump through. In order to buy a home for less than market value you may have to give a little. Another way to buy a foreclosure property is to find a bank owned property or a VA, HUD, or a HomeSteps home. Most of these homes have been through the foreclosure process and can be purchased at a savings to the consumer. To buy a HUD home you must use a realtor. The other homes are generally listed by realtors. To buy the other homes, not a HUD, you make an offer similar to buying any other home. There may be certain addendums that need to be signed. Be certain to read them and if there is any doubt consult an attorney. Not all addendums are “standard” know what you are signing before you sign!
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