How To Buy Foreclosure Homes: 9 Ways

1. Buying foreclosure homes at the auction.

2. Buy a trust deed. If you are a lender and the buyer quits making payments you just go through the foreclosure process.

3. Buying foreclosure homes through private party lenders. For those who have made junior liens on the homes and find themselves with homes after foreclosure, you can try buying from them and they will carry back the amount of the loan they had originally.

4. Bank Repossessions. Negotiate with the bank immediately after the auction to purchase homes.

5. Buying foreclosure homes from the owners. Many owners would happily sell to you to save their credit. Check real estate ads that lists 'take over payments'.

6. Buy trust deeds at auction. Many people make junior liens for interest income. There are times when they have to be sold at discount prices.

7. Government foreclosures. These foreclosures are sold through HUD

8, Watch obituaries. If there is no next of kin the home might be foreclosed to pay outstanding loans.

9. Watch for bad times...like now.

How To Buy Foreclosure Homes: Finding Homes To Buy

Depending on how much time and effort you wish to spend determines at what stage you will start your search to buy foreclosure homes.

Publications:
The first place to look is your local newspaper. It should be at or near the classified sections under trusties or sheriff's sales. Look for non payment of mortgage foreclosure. If you live in a large city you may have a legal publication that lists everything that occurs in the county including foreclosure, bankruptcy, business license and legal notices against people and property.

Attorneys: Attorneys on the whole are not very helpful in search for foreclosure homes..

Real Estate Agents: Real estate agents are a good source because distressed property owners usually make an effort to sell their homes before they lose it. Remember however, the agent represents the seller so the property is probably listed at full market value so no good deal will be had this way. Make your offer to buy and see what happens. The closer it gets to auction day the better your odds are.

County Clerks Office: Go To the County Clerks office and read the foreclosure postings.

A good way to find perspective foreclosure homes to buy is with flyers and/or putting ads in the local paper. You would then be dealing with distresses owners who are more willing to deal with you. Key to success...Get there before anyone else...You will get your best deals finding foreclosure homes to buy before the auction date.

What Not To Do

Make sure you do a title search. If you get a deed signed by the owner you don't want to then find out about other liens on the foreclosure home you just bought, that you just inherited. Watch for other mortgages no matter what position it's in:

1. Mechanics liens for work done and never paid for.

2. Assessments from any government agency or improvement district.

3. Tax liens - property, federal and state.

4. Judgments.

6. Order title insurance to protect your self.

How To Buy Foreclosure Homes: Dealing With The Owners

Most owners refuse to believe they are about to lose their homes through foreclosure, like the ostrich, they stick their head in the sand until it's to late to help them. If, after your first meeting with them, they show great reluctance for you to buy their homes, leave them your card. That's about all you can do. You can waste a lot of your valuable time trying to show owners the how hopeless their situations are and foreclosure is near. The best way to go about this is to buy vacant foreclosure homes, owners that have already moved might be more agreeable to your offer to buy their homes.

If your strategy is to buy the foreclosure homes for back payments and costs, you must be extremely tactful in your dealings with the owners facing foreclosure

There is an opportunity to buy their homes during the foreclosure reinstatement period. This gives the added advantage of being able to see how the homes look inside. Best advice how to get your message out is to send a simple postcard with something like "I buy homes". Don't say that you 'buy foreclosure homes' as this advertises their plight with anyone coming in contact with the postcard and if you send a letter, chances are it will be put aside with all the other unopened letters. After you decide the foreclosure homes you are looking at are ok ask the owners how much they will take to buy the equity. You would be surprised how little some people want. If you can agree write up an agreement something like 'subject to the $______ mortgage which is in default'. Assuming the original mortgage is the ideal. If you have a mortgage with low interest the bank may enforce the 'due on sale' clause. If possible add your name to the existing insurance policy. Otherwise the new policy with your name on it won't match the borrowers name and again the bank may enforce the 'due on sale' clause. Just make sure YOU are a named insured in case of fire or liability claim. Once the bank has no problem with you taking over the foreclosure property, have the original owners name removed from the policy. If a lender ever rejects your payment to reinstate the loan you might have to obtain financing from either that bank or another. It might be a good idea to be pre-qualified with you favorite bank. As long as you now have title to the property you should have no problem financing it. If you can't come up with the needed cash to buy at the auction this is the next best thing but remember this does not wipe out junior liens which would make the property less profitable.