Buying Homes Through a Foreclosed Sale

Buying a home through a foreclosed sale is what happens when a home that is in foreclosure gets sold at a discounted price. This is so that the mortgage holder doesn’t have to absorb the cost of the home and have it sitting on their available home rolls and have to pay taxes and maintenance costs. A foreclosed sale is also called a short sale, because the lender is selling the house short, or for less than the amount of money that is owed on the house. The homeowner that is in foreclosure usually has to pay the difference between the foreclosure sale price of the home and the amount that was originally borrowed in order to finance the home.

Mortgage companies and banks never like foreclosures because it costs them money to carry a home once the homeowner has defaulted on a loan which is why so many mortgage lenders and banks are willing to do foreclosure sales. If you do your homework and make a fair offer to a lender on a home that is in foreclosure or pre-foreclosure the chances that the mortgage company or lender will approve the foreclosed sale are pretty good. If you want to increase the chance of getting approval for a foreclosed sale it may help if you have a cashier’s check for the amount of the sale ready to go. If you don’t want to do that or if you are getting financing to pay for the price of the home then it may speed things up if you fill out a pre-approval application or complete a buyer’s biography detailing how you will pay for the home. Once the mortgage company or bank is sure that you have the money or have the financing you need to pay for the house they will probably go ahead with the foreclosed sale and you will own a new home.