Foreclosures are properties that were repossessed by the lending institution that can be acquired at wholesale. There are three types of foreclosure purchases. Any of the following methods can help you obtain a bargain.

1. Buying from an owner prior to a foreclosures sale (pre-foreclosure).
Deal with an owner direct, since the foreclosures owner is in default you can offer a small amount of cash to take title to the property which would save their credit had the property gone into foreclosure.  This process can allow you to acquire property at 60-70% of market value.

2. Buying at a foreclosure sale.

Foreclosure sale is done through an auction process where the highest bidder wins title to the property. You are allowed access to the foreclosures property to inspect it prior to the auction. the property is delivered free and clear of any liens.

3. Buying from a lender after a foreclosure sale (Real Estate Owned, or REO, by the bank)

This procedure is done by dealing with the banks REO department which provides you a list of properties that the bank now owns and is willing to sell at a mutually agreed price.