There are many ways to purchase a foreclosure property. Here are the three most common ways.

Pre-Foreclosure is in the early stages of foreclosure. In most cases the homeowner is behind in payments (in default), usually at least three months, and the bank, or the trustee, has given the borrower/owner a deadline to bring the mortgage current. Purchasing a home in this stage requires going directly to the borrower/owner to purchase the home before the bank forecloses. Buying a home in Pre-Foreclosure is not recommended unless you have experience or assistance from a real estate agent.

The second way to purchase a foreclosure property is at Trustee Auctions. These are public auctions at the county courthouse. It is important to research and evaluate the property before attending the auction so that you are informed of any outstanding loans or liens against the property to determine if it is a wise investment. If you decide to attend an auction it is advised that you contact the trustee the day befor to confirm that the property will still be sold since there could always be last minute changes. If the trustee does not receive a high enough bid to cover the current liens they will then buy back the property. Now that the trustee has bought back the property it is called REO or Real Estate Owned which simply means that the property has gone through the foreclosure process.. Since banks are not in the business of owning houses they will look to sell the home as soon as possible.

In order to purchase REO, or bank owned property, you must either contact the bank directly or get assistance from your Realtor. It is strongly advised that you seek assistance from your Realtor since this step requires experience in dealing with REO departments. Depending on current market conditions REO departments will most often sell their homes through a selected real estate agent utilizing the local MLS or Multiple Listing Service. The result is that the property will be exposed to more potential buyers and often increase the potential selling price. This means that the potential bargain is not as good as a home in pre-foreclosure.