There are basically three stages of
foreclosure when investors and prospective homeowners have a
Preforeclosures are still owned by the borrower but
the mortgage is in serious default. Often borrowers will
sell their property at this stage to avoid the impact of
having a foreclosure on their credit report.
Auction properties have been posted for public sale
and may be bought at the time of the foreclosure auction by
arranging to pay the arrears plus other costs at the same
time the lender legally takes ownership of the collateral.
This type of sale is sometimes called a Sheriff's Sale
as the local sheriff is responsible for seizing the property
and conducting the sale.
REO Property is the term for "real estate owned" by
the bank, savings and loan, or other lending entity after
the foreclosure sale or auction is concluded with no other
purchaser buying the real estate.
What is a Down Payment Auction?
A down payment auction is when a property is listed for sale
at public auction and bidders are bidding on the amount they
are willing to pay as a down payment with the property owner
financing the balance. Some of the eBay listing you see
above may be for down payment only.
What is a Tax Deed Sale?
deed sale occurs when a governmental agency seizes property
for nonpayment of taxes. A tax deed sale is one of two
methods the government may use to recover unpaid real estate
taxes; the other being a tax lien sale.
At a tax deed sale, the minimum bid is
generally the amount of back taxes owed plus interest, as
well as costs associated with selling the property. After
the sale, title is transferred to the new owner by either a
Tax Deed or Sheriff's Deed. If the property is not purchased
at auction title may revert to the county government.
Can People Make Money Buying Foreclosures, Tax Sale
and REO property?
Absolutely! Most of
the great family fortunes in our country have been created
through real estate ownership and investments in real
People just like you are attracted to the opportunities
presented by dealing with foreclosures because frequently
they can buy the properties at prices substantially below
market value. Buying properties at discount prices is the
surest and quickest way to make money in real estate.
Individuals who are looking for a home can get a significant
amount of equity up front with foreclosures.
Of course, there are no guarantees with any investment, but
all across the country, people earn almost immediate income
by "flipping" foreclosure properties for big profits. And
many landlords are able to buy and rent foreclosures,
producing positive cash flow and long term wealth