How to Buy a Home Before It Goes to the Sheriff Auction

Buying a foreclosed property may allow you to build your real estate investment portfolio while spending less than the market value of the home. In most states, lenders have the option of selling foreclosed homes at a sheriff's sale, usually through an auction. However, you can use several strategies to purchase a home before a sheriff's sale to avoid the bidding process.

Locate a home on which the lender has issued a notice of default, which is a document that gives the owner the right to cure his delinquency before the lender forecloses on the property. In some states, lenders must publish pre-foreclosure notices in local newspapers. You can also call lenders or visit your county recorder's office to find pre-foreclosure homes.

Contact the owner by telephone or mail to inquire about purchasing the property. If the owner knows she cannot cure the default, she may be willing to discuss a sale with you.

Hire an appraiser to determine the market value of the home, and hire a home inspector to look at the home to find defects that you will need to pay for after purchasing the home.

Hire a title search company to check for liens on the property title. A lien may exist if the owner owes delinquent taxes, or if a creditor has obtained a judgment against the property owner for unpaid debt. You will be responsible for satisfying these liens if you purchase the property.

Submit a written contract to the owner for the purchase of his home. The lender must accept the contract before the process of closing the sale can begin. In most cases, particularly when you offer a purchase price that is less than the owner owes on his mortgage, the owner's lender must also approve the purchase.

Contact the lender's foreclosure attorney to provide notification of the pending sale. This step is necessary to stop the foreclosure process and keep the home from being sold at a sheriff's sale.

Obtain funding for the purchase of the property. If you do not have the funds available for the amount of the purchase, contact a mortgage lender or broker to obtain financing.

Schedule and attend the closing with the title company. You will need to provide any down payment required by your lender and sign documents to transfer the title to the property.