It may not be easy to recognize brand new foreclosed home sales because they do not appear on national listings as such
. Most of these types of foreclosure came to be after builders fail to pay off their home construction loans before they can find buyers for their newly constructed homes. Under this type of foreclosures, the lenders that offered the construction loan take back the property and sell them through real estate brokers. Some refer to these properties as hidden foreclosures because they will not be marketed as foreclosures.
Some investors and first-time home buyers find that another manner of finding foreclosed home sales is through properties that are just about to go into foreclosure. After a bank or lender issues a notice of foreclosure, the original owners can either pay off their entire loan or handle the sale of their home themselves. Since these owners would not want to let all their equity go to waste under a foreclosure so they might be willing to sell their home for a price that will represent the difference between their equity and the home's real market price.
Properties in Pre-Foreclosure
This types of foreclosed home sales require a lot of guts for the risks may be equivalent to the rewards. At this point, the original owners are hard pressed to sell their property so you can probably get a good bargain for the home. If you are able to strike a deal this way, your seller will be thankful because you have saved them from the stigma of being foreclosed on. You will also be doing the lender a big favor because you will assume the debt owed them. What you need to watch out for is the actual condition of the property and its title.
Since the owners failed to make payments on their loan, it can be assumed that they have also been unable to maintain the home so you need to make sure you carefully inspect the property first. You must also do a title research for any hidden taxes, holds or liens still attached to the property. If you are willing to the the work, you might just snag a real good bargain.