Foreclosure Markets

If you are considering entering the foreclosure market, don't rely on the get rich quick gurus for your information. They might be a jump off point, but if you are looking for success find a local expert who can help you learn the ropes. The nuances of the local market will make or break you in the end. Make sure you understand them.

Foreclosures are generally looked at as three markets - Pre-foreclosure, Foreclsoure and REO.

The "pre-foreclosure" market is anything but. It is the market of homes which are in the first stage of the foreclosure process. This market comes with deadline, but there can be deals if you know how to spot them. If you are working with an agent to find a home in this market, look for an expert who knows how to monitior the time tables and avoid unfortunate 11th hour firedrills.

The "foreclosure" market refers to those homes already scheduled for public auction. If you are in this market, cash is king. Because the timeframe here is generally very short, 20 to 30 days, to play "let's make a deal", you have to be ready to make it happen.

REOs are properties which have been put up for auction without an appropriate bid made. Now the bank owns and they have to negotiate a sale. Whether or not an REO is a deal depends on the bank's willingness to negotiate. Generally, banks become more willing to negotiate when they own a lot of properties and less willing to negoiate when their inventory is low.

Are there deals to be had? Aboslutely, but you have to look. If you find something you like but don't like the deal today, try back. As the bank's financial position changes, so will their willingness to work with you.