A foreclosure is considered to be a legal process where a lender will make an effort to recover the balance of a mortgage loan when the homeowner or borrower stops making the required mortgage payments to the lender by pushing for a sale of the property or asset that is being used as the collateral for the mortgage loan. A foreclosure is usually issued on a property once the mortgage note has been defaulted on after several months. The foreclosure process will vary from state to state. A foreclosure can ultimately be a great deal for most home buyers, whether they are planning to live in the foreclosed home or as an investment property. Buying a foreclosure is not for everyone but it can sometimes turn out to be a better deal because a home buyer may be able to purchase at a reduced market price.
Of course with everything in life, there can be some advantages and disadvantages to purchasing a foreclosure. Some advantages that you would want to consider when it comes to purchasing a foreclosure could be the potential of getting a bargain price on a foreclosed home, the urgency of the seller who may be hoping to avoid the full blown foreclosure process, and the REO (Real Estate Owned) advantage meaning the home is owned by the lender and therefore making the title free and clear against any liens or back taxes. Some disadvantages that you would want to consider when it comes to purchasing a foreclosure are the time frame of financing, the condition of the home, and the additional paperwork that is required on a foreclosure or real estate owned home. In the end, when you are deciding whether or not you want to buy a foreclosure, you will want to get a hold of a realtor, attorney or another qualified professional that can assist you on any properties that you may be interested in.