You can buy foreclosed homes at the best price if you study the foreclosure process and decide the best time to buy. Foreclosure is a lawful process in which the lender takes back ownership of a real estate property when the buyer of the property defaults. For homebuyers, foreclosures offer opportunities for bargain buys because most often lenders are eager to sell their foreclosures. Lenders do not want to hold a lot of non-performing real estate properties.

In terms of whether the court is involved or not, foreclosures are either judicial or non-judicial. In states where the judicial process is implemented, lenders are required to file a court case to complete foreclosure proceedings. Florida is one of the states that carry out the judicial foreclosure process. In states where the non-judicial process is enforced, lenders do not need to sue to foreclose defaulting properties.

The steps to foreclosures can be generally grouped into four periods, namely the pre-foreclosure, notice of default, foreclosure sale and redemption periods. Pre-foreclosure is the period when the borrower begins missing payments. This can be a good time to make a purchase offer, especially if the borrower is intent on not going into foreclosure and thereby protect his credit record.

The next step is the lender's sending of the notice of default to the borrower. If nothing is done to update payments and penalties, the third step is the foreclosure sale, which is usually done on courtroom steps in mortgage states. The redemption period is the allowable time for the borrower to get back ownership of the property by paying the full loan balance plus penalties and additional fees. Buyers should not make improvements on the property during the redemption period in case the former owner of the property pursues the property.

While buying foreclosures mean significant savings for buyers, the process could be emotionally draining. Foreclosures almost always involve families losing their dwellings. The purchase process and the paperwork are also more complex than a conventional real estate purchase. Oftentimes, the foreclosed properties are also vandalized and dirtied, resulting in repair costs for the new buyer.

Homebuyers can approach several professionals for help when looking for a foreclosed property to buy. There are realtors who specialize in foreclosures and therefore knowledgeable about foreclosures. A home inspector can make sure there are no parts of the foreclosed house that would require expensive repairs. Mortgage lenders or brokers provide the loan to qualified homebuyers.