Millions of foreclosed homes are for sale all over the United States. These houses pose a great opportunity for investors and families looking for a home. Investors may buy a foreclosed home as a rental or to fix up and sell — or flip. Those looking to buy a foreclosed home often find they may buy a house for well below market value. With a bit of research, you may buy a foreclosed home as an investment or as a primary residence.
Do your research. In order to get the best deal on a foreclosed home, you'll need to know the average price range for similar homes in the area. Look at listings of houses on the market at the full regular price and at foreclosure listings to get a good grasp on fair pricing.
Explore foreclosure listings until you find a home in which you are interested. Visit the websites for the U.S. Department of Housing and Urban Development, Fannie Mae and Freddie Mac. Foreclosure.com is another resource.
Determine what the home is worth. Use the real estate pricing data collected in your research to calculate a base price. Be sure to include the cost of any necessary repairs or renovations. If a foreclosed home purchased for 30 percent below market value requires a complete renovation, it may not be the best deal.
Approach the lender of the foreclosed home and ask about buying the property. Buying from the bank or lender is the safest way for an inexperienced buyer to purchase a foreclosure. The lender will often help make the process smooth and easy, and will reveal any liens or taxes on the property without you having to do substantial research.
Make an offer on the home. Many lenders, when in possession of an overwhelming supply of foreclosed houses, may be motivated to reach an agreement with a potential buyer. They may cut the price, eliminate closing costs, or offer low-interest loans for those willing to buy a foreclosed home.