Free foreclosure listings

"Are the free foreclosure listed properties bargain purchases?" That was one of the many questions asked of me when I was part of an "Ask the Experts" seminar. My answer was that the primary reason to buy a foreclosed property is to purchase it at a wholesale, below-market, bargain price.

Not all properties on foreclosures listings are bargains.

However, many foreclosure properties are not bargains. In fact, they are often overpriced, usually because the lender loaned more than the property is worth. I've seen many foreclosure houses, for example, that aren't worth the amount of the mortgage being foreclosed.

Each foreclosure is different. For example, two years ago I saw a four-bedroom house in a good neighborhood sold at a foreclosure sale on a second mortgage for just $5,050 cash. However, the buyer had to pay the approximately $20,000 in defaulted first mortgage payments. After painting the house and fixing it up, the buyer sold it for a net profit, I estimate, of at least $50,000.

Three ways to buy foreclosure properties.

I hate to use a dirty four-letter word in a family web site, but buying foreclosure bargains involves W-O-R-K. However, the work is not physical. It involves patiently tracking the foreclosure property to discover the best time to buy it during the foreclosure proceedings.

Check back soon - I'll post the tips over the next several days...