When it comes to navigating the landscape of foreclosure shopping, you need to know:

• Avoid Court Auctions: Tax defaulted properties tend to end up as county property and can be sold through auction. There are real bargains to be had, but consumers end up buying the property sight unseen. There is a real chance that you can end up owning a home with no appliances, stripped electrical wires, no plumbing and inches of mold.
• Avoid Homes with Residents: When a homeowner is at risk for losing their home, they are notified every step of the way. Some owners believe they will get a magical reprieve and be allowed to stay in their homes, and stay put until forced. If the foreclosed property you are interested in has a resident, you may end up in the position of evicting them.
• Avoid Paying for a List of Foreclosures: There are many websites that offer information regarding "foreclosures in your area" and they will charge you a fee to release the information. Why waste your money when your local bank most likely has a huge list of properties they are trying to unload and will provide you with that information for free.

What Type of Foreclosed Home Should I Buy?

If you are interested in the foreclosed property game, then set your sights on a real estate owned (REO) home. These properties are the property of the lender (due to mortgage default from the borrower). REO homes are the safest type of foreclosure purchase as the homes are vacant, have clean tax records and are priced to sell. Unlike a short sale scenario, the banks already own the properties and will move very quickly to unload them.

What do I need to buy a Foreclosed Home

If you opt to buy an REO, the process may feel similar to buying a home from a property owner. Since banks are not real estate specialist, they will hire a broker to expedite the process. The broker will take you a tour of the house and answer your questions. Interested buyers are encouraged to hire an inspector and conduct their due diligence regarding the property. Unlike privately owned homes REO are typically sold "as is."

Prospective buyers of foreclosed properties should expect to make at least a 20 percent down payment on the property and will need to secure a mortgage to finance the rest of the purchase.