I received a call yesterday for a list of foreclosures. Nothing new, I get these everyday. I decided to ask the guy why he wanted a list of foreclosures. He says to me,I want a really good deal. I say to him, so you think the banks are giving away money? He says, well they price the foreclosures lower. I have sold many foreclosures and I think alot of people don't exactly know how it works. I shared this information with him and I thought I would share with you today.

When a person is going into foreclosure, if there is equity in the house then they will put it up for sale to try to save the extra lawyer fees and to save their credit. We all know how important that is. Eventually if noone has purchased it, it forecloses. The bank then (in every case I have done) hires TWO appraisers to find the market value. Then they put it on the market. Did they give away money? no.... some are priced lower, but in most cases the properties are priced low to make up for the condition. By the time you buy it and fix it back up, you would have paid less had you gone to a seller without late fees and attorney fees. Also let's remember that the bank employees are not financially attached to this property so they are LESS likely to negoiate. (they aren't as concerned with selling the house) A seller that has to move out yesterday is more likely to negoiate and will definately get back to you quickly. If you do decide to go the foreclosure route just be aware you will not get an answer right away.

There is also alot more involved. If a seller or a foreclosure has owned the house for more than 4 years, your chances of getting a deal increase. Anyone who purchased in the last two - three years does not have equity (unless of course they put money down). Keep this in mind when choosing your new home.