That lender may be willing to waive some closing costs, maybe even offer a break on the interest rate or the down payment. A novice must learn to navigate the foreclosure process. Todd Beitler, owner of the Real Estate Library in Boca Raton, Fla., and author of a foreclosure how-to manual, says the time and effort can translate to savings. If somebody spends 10 hours a week for five weeks to do research, it's worth it. For most consumers, however, the foreclosure process can prove daunting, Reed says.
Good buys are available, but they require research, preparation, patience and persistence.
The foreclosure process starts when a property owner falls behind on mortgage payments. Because the homeowner has been in financial trouble before defaulting on the mortgage, the home likely hasn't been maintained. Houses in poor condition might fetch bargain prices, but repairs can boost the cost again. This document is a public record, and for buyers, it's the first step in locating a property in foreclosure. A buyer looking for foreclosures also can buy magazines and newsletters that list properties in default.