There are different processes in purchasing a foreclosed property. One option is , the home can be sold at the foreclosure auction but the buyer should not be the homeowner. Second option, the lender can take the home back as the highest bidder.

If one purchases the property at an auction he/she will be buying a property that may have major deficiencies with its title, structural issues, property taxes due, illegal structures on the property, un-permitted work, or other issues that can cause the bidder to be sorry later he bought the home. If you intend to bid on a foreclosure property at auction, I suggest you try and see inside the property before the sale

This is does not mean that you are already breaking in to the property, it can be done by contacting the property owner, and asked permission from the homeowner .But be very vigilant like bringing in permission letter in case police attention is called while checking on the property.

One can go through this process by doing their homework in the public records or get an attorney to do it for you. In fact, an attorney can do a complete and thorough title search in a matter of minutes or days. An attorney may also do an open permit and code violation search in about a week depending on the local city or county’s code enforcement department.

Other cities spend time to do it if you come in and others will make you pay and wait for 30 days or more. While this is being done, you should have a home inspector to do the inspection if he can get inside the property, but if he is not allowed to do that then , have him do a visual from the exterior to see if he notices any structural issues.

Another way to purchase a home is to purchase an REO home. This is a property that has been foreclosed and owned by bank. Most of the time a lender is forced to take a property to the auction in order to eradicate taxes due against the property, if these liens were not paid the , the lender will assume in paying taxes of the property that are due.

The big difference in the lender getting the REO and reselling it is that the lender must bring any delinquent property taxes current for the buyer. The lender must also provide “fee simple” or “free-and-clear” title to the buyer. The process of clearing title deficiencies can sometimes be very expensive so buying REO’s eliminates these related issues.

When purchasing a property, an REO property is much better than purchasing a property at a foreclosure auction. There are exceptions but the buyer must be very aware that there are hidden or other issues can make the cheap purchase more expensive than a new home. So as always, do your homework and “buyer beware”.