A bank will foreclose on a home when the borrower has not been able to make the payments for some
reason. There are occasions when the lender will work with a homeowner to correct a short term
financial issue but if the bank thinks it is not going to get paid then it will foreclose and take possession
of the house. The sole purpose for taking the house is to minimize future losses from missed payments
and to resell the house.
Once the bank takes the house, their first priority is to sell it and get their money. Some are listed in the
newspaper or online for auction. Others are sold to companies which specialize in purchasing
foreclosure homes and reselling them. In many cases they invest more in home renovations after the
purchase so that they can sell the home for an even greater profit.
If you are considering investing in a foreclosed home, there are a few things to be aware of. Inspect the
property very closely to know exactly what you are buying. Most purchases are in as is condition and
you want to understand any repairs that you might need to make. It is a good investment to have a
contractor visit the home or a home inspection professional to verify all of the aspects of the home that
you cannot see. Once you know the condition of the home, make a fair and reasonable offer. The bank
needs a certain dollar amount and any offer that is considerably lower is likely to not even rate a
response. Once your offer is accepted, secure the home as quickly as possible. Foreclosed homes have
become a target for vandalism and destruction when they sit empty for long periods of time.
Buying a foreclosed property from a bank can offer a great opportunity for a more than fair price. You
won’t be dealing with a homeowner who has an emotional or sentimental view of the house. It is strictly
about the dollars and the bank wants to get their money and move on. Make a fair and informed offer
and you have a great chance to get a house that will prove to be a good investment for your future.