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Bank foreclosures — also referred to as Real Estate Owned (REO) properties — represent great opportunities to acquire real estate at prices well below market value.
If a homeowner falls behind on his or her mortgage payments, the lender — usually a financial institution like a bank — will initiate foreclosure proceedings on the property. If during this time the homeowner and bank can't work out a deal to get the loan current, the property will be put up for auction.
Sometimes a property will fail to sell at auction, or the lender will bid the highest amount to protect its investment, and the home becomes a bank-owned foreclosure. A bank will then try to sell this REO property through a Realtor® or third-party marketing company.
Because banks are in the money-lending business — not the real estate business — they want to sell as quickly as possible. Banks are not very concerned with turning a profit — they just want their money back.
So where can you find bank foreclosures?
Hud.com offers America's most reliable and up-to-date database of bank foreclosure listings. Of course, you can also scour the newspaper and visit local court houses for public announcements and notices about foreclosure auctions. But that'll cost you so much time and unnecessary work.
And timing is everything when buying bank foreclosures.
Keep in mind, this process takes time. But, with the right mix of diligence and knowledge, you can find a real steal. Check our Web site frequently, because we update it with new bank foreclosure listings at least twice each day.