This morning we have a guest post from Zack Preble at Foreclosure.com. For over 10 years, Foreclosure.com has been the largest provider of foreclosure records and investor training in the US. They currently have over 2 million foreclosure listings available, and provides data to most of the foreclousre list vendors. The mainstream media gets foreclosure data for its reporting from Foreclosure.com. 
Here is their outlook on foreclosures:
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The word “foreclosure” just oozes perceived savings — people hear it and automatically think a home is an instant bargain.
More often than not this assumption is usually accurate, but there are exceptions.
Let’s be clear: Foreclosures can be purchased for pennies on the dollar. In fact, it’s common for buyers to score homes up to 50 percent or more off the original price.
That’s because lenders are in the money — not the real estate marketing — business. Often, the only goal for them is to just break even and recoup as much money as possible on the loans that fall into default. These repossessed homes are typically featured in public auctions, which are then sold to the highest bidders for considerably less than their market values.
But, as we already mentioned, there are risks to purchasing a home at a foreclosure auction.
First, each state has different laws and procedures that govern the process, which you must be mindful of before submitting a non-refundable down payment. Be careful not to get burned on a property because of a quirky loophole. Ignorance is not an excuse.
Second, you need to have access to cash and be able to close fast — sometimes 30 days or less. Therefore, you have to have financing (and cash) in place before placing bids to purchase a home. What’s more, a non-refundable cash (earnest money) deposit is usually required on the spot.
Third, competition can be fierce and intimidating . especially if it is your first experience. Local investors sometimes feel a sense of entitlement at
these auctions and don’t welcome newcomers with open arms. They can even conspire to run up the bid price to try and get you to overspend.
Therefore, do yourself a favor and attend a few auctions first before getting in on the action.
Last but not least, always remember that you buy the property strictly “as is” at an auction. That means it’s critical that you view and inspect the property (if possible) before making an offer. There are no money-back guarantees in this business . it’s “buyer beware.”
With risks, of course, there are also rewards. And with foreclosures the rewards are traditionally rather significant. If you do your homework and come prepared it should be smooth sailing.
Whether you’re a first-time homebuyer or experienced investor, a foreclosure auction is a great way to save – or make – money in today’s sizzling real
estate market. If you are looking to capitalize on foreclosure properties being sold at these public auctions, Foreclosure.com is a tremendous resource that will get you on the path to success.
