Bank Foreclosures - How You Can Profit

If you're interested in making money from real estate, then you need to realize that bank foreclosed homes are coveted by investors, thanks to their high potential for profit. Bank foreclosed homes regularly sell at prices well below market value. You've probably heard the old saying 'buy low, sell high', and foreclosed properties are the perfect opportunity to do just that.

Basically, a bank forecloses on a home when the owners default on their mortgage payments. This doesn't happen immediately, and it can take a number of months for the bank to go ahead with foreclosure proceedings. Once the foreclosure is finalized, the bank or lending institution is left as the owner of a house. As an investor, you are able to buy the property directly from the owner up until the point at which the foreclosure is final. Owners are generally keen to sell, so that they don't end up with the black mark of foreclosure on their credit history. If there's substantial equity in the property, you can make a good profit.

You don't have to try and get in that quickly, however. Once the foreclosure is final, the house will be put up for sale, either by the lending institution or through an auction. The lender is keen to sell the foreclosed home for a variety of reasons, including:

- Banks don't like a large inventory of foreclosed homes, it highlights bad lending decisions

- The lender wants to recoup their losses

- It costs too much - maintenance, insurance, taxes, security

Sometimes the lender will sell their foreclosed homes through a real estate auction. If you take the time to do your research, then you can really snap up some bargains at auction. But if you're not careful, you could end up spending for more than you should, paying well above market value. So doing your homework prior to the auction is vital.

You should always thoroughly inspect a foreclosed home before you place a bid. Look at any repairs that might be required, and work out what they're going to cost. Also work out how long it's going to take you to have the house repaired and ready. If you can't inspect the property for some reason, then always assume the worst, and allow a big margin for unknown expenses.

As more people become familiar with the idea of buying foreclosed homes, they are getting harder to find. It's a good idea to have access to good foreclosure listings so you know what's coming up and can act accordingly. You can get foreclosure lists from lending institutions, courthouses, government agencies, etc., but be aware that doing this can take a lot of time and resources.

It's far more cost and time effective to sign up to an online foreclosed homes listing service, such as Seized Real Estate. You'll get timely, accurate listings of bank foreclosed homes, so you can be first in line when it comes on the market. If you're serious about buying foreclosures on an ongoing basis, then receiving accurate information is vital to your success, and worth the few dollars it costs to keep your finger on the pulse of the market.

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