Foreclosures, Short Sales, And Auctions There is lots of talk about buying foreclosures nowadays, which in most peoples minds is "getting a great deal." Yes, you can get a great deal this way but you have to make sure that you actually are. What that means is it takes lots of time and effort on your part to do the research necessary to find this opportunity. So how do you go about buying a foreclosure? Firstly, let define what a foreclosure is: it is the status the mortgage bank has classified a house that is usually more than three months in arrears by the borrower. The bank will then proceed with the foreclosure action through the court because the borrower, usually the homeowner, has defaulted on the promissory note. The house is then put up for sale and the proceeds of the loan go to payoff the mortgage. If the sale does not provide the full amount of the payoff, the bank can then get a deficiency judgement. This process takes time and during this time the homeowner sometimes is able to work out the problem with the bank and solve the situation. You can find out about these foreclosure homes by either contacting banks or checking with local real estate agents. Sometimes during the foreclosure process a bank will invite prospective buyers to make an offer to purchase the foreclosed property. A bank may accept an offer below the amount of the mortgage on the property. This is called a Short Sale. Basically, the bank wants to cut its losses. If you are aware that a bank is taking offers on a foreclosed home, be prepared to make your best offer, and wait. Banks will take their time when considering offers and this process can take months. And after all these months have passed, you may not get that property because someone else has made a higher bid. Sometimes a bank will list a price on the foreclosed property very low. Just because you made the full price offer does not necessarily mean the bank will accept the offer. Try contacting a bank (the REO Department - real estate owned) or real estate agent to find short sales An Auction is another way to possibly get a great deal on a property. I say possibly because I have seen bidders over-pay at an auction. Auctioneers want to create a buying frenzy and many times, if there are several people bidding on the same property, the price could actually go higher than fair market. You can find out about local auctions by looking in the newspaper classifieds under "Legal Notices." You can also go directly to your local Town or court house to find out when and where an auction will be held. One thing about buying at an auction: you must pay all cash. You cannot buy at an auction and then apply for a mortgage at a bank. Terms are usually a ten percent certified check at the auction and the balance in thirty days. If you are planning to buy a foreclosure property, it is recommended that you seek the advice of a real estate attorney. By Maury Jazzetti Website: http://www.betterlifestyles.com