How do you buy a forclosed house?

A common method is to attend the foreclosure sale itself and enter a bid. Generally, the county clerk's office will have a list or a posting of properties scheduled for sale. Call you local county clerk's office and ask what their process is for obtaining a list of scheduled sales.

On the sale day, attend the sale and place your bid for the property. The sale is held in a typical auction manner.

You will have to do your homework prior to the sale! It is not easy to buy a foreclosed home, because YOU have to do the work -- not a Realtor or a banker. You will need to research the property, determine a price you are willing to bid, and arrange preliminary financing BEFORE bidding at the sale.

At the sale itself, the institution that is foreclosing will determine and announce the sale terms. Each one is different, so listen closely. Some require payment immediately, by certified check, and some require payment up to 45 days.

The winning bidder of the property is responsible for all closing costs of the sale, unlike a normal home purchase where costs are shared between buyer an seller. Any back taxes on the property are the responsibility of the BUYER.

This is not a process to enter into lightly, despite what late-night infomercials would have one believe. If you do plan to do this, find a trusted friend or associate to help walk you through the process. It can be confusing. Most of all, remember that this is NOT like a typical home purchase.

How do I know about foreclosures? I am a banker and have had to handle these sales for my bank for 5 years. It's painful to hear a buyer come back after the transaction and say, "But you didn't tell me I had to pay the taxes" (or closing costs, or repairs, etc.) Research, ask questions before the sale, and befriend someone who has done it before. Be prepared!