Basically a foreclosure is a situation in which a home owner
defaults on the mortgage payments for their house. Such properties which
are foreclosures for sale are called as distressed because typically
the home owner is in financial distress and has defaulted on his
payments. The owner may be in financial distress because of the
following reasons:

o Laid off/fired or quit job

o Unable to continue job due to medical conditions

o Mounting debt and excessive bills

o Tiff with co-owner or divorce

o Relocation to another state due to job transfer

Getting
foreclosures for sale does not happen in a day. A typical foreclosure
process can extend over a few months. Each stage of foreclosure offers
different types of opportunities to the potential buyer.

There are three stages of foreclosure namely

1) Pre-foreclosure

2) Foreclosure Auction

3) REO stage or Real Estate Owned by banks

1. Pre- foreclosure
is the first stage in the process of foreclosures for sale. In this
stage the home owner has not paid up the mortgage of the loan for the
first time and is now considered as a defaulter. A pre-foreclosure is
also called as NOD (Notice of Default) Or Lis Pendens as a formal
warning is sent to the home owner about default on his payment.
Investors can find property at the cheapest rate at this stage. Further
damage to the credit rating of the home owner can be avoided and the
property can be transferred to the buyer at a mutually agreed upon rate.
The best leads to learn about properties at this stage are attorneys,
friends and acquaintances as well as real estate agents.

2. Foreclosure stage is the second step in
foreclosures for sale. The auction is the next stage after the
pre-foreclosure stage. You can attend an auction and bid for the
property. Usually the auction is held at the county clerk’s office.

During
an auction, the lender tries his best to get the best possible price on
the property under foreclosure. At an auction sale, buyers are required
to buy in cash and without having the facility for prior inspection of
the property in concern. However an auction sale does permit good
bargains as much as 40 to 50 percent below market value.

The best
way to identify foreclosures for sale at this stage is via the county
clerk’s office. Find out about notices of default that have been filed
to locate pending foreclosure sales.

The foreclosure process will
vary from state to state depending on whether it is a title or lien
state which determines a judicial or non judicial form of foreclosure.
Judicial foreclosures pertain to mortgages and take long to finish. Non
judicial foreclosures involve deeds of trust, where a third party, a
trustee handles the property after period of default.

3. Third
stage is Real Estate Owned (REO) stage where the property reverts to the
bank. REO properties are also a good opportunity to purchase
foreclosures for sale as the bank is in a hurry to get rid of its ‘non
performing asset”. Thus at each stage of foreclosure, there are numerous
opportunities for obtaining foreclosures for sale. Banks can be
contacted directly or online listings can be found through genuine
foreclosure listings at this stage.