Can You Score a Good Deal on a Foreclosure?

(Photo courtesy of Brendel)

By Michelle Williams
Maryland Newsline
Wednesday, April 23, 2008

Although people have found great deals with foreclosure properties, there are some risks associated with them. Test your knowledge to see if you have what it takes to make it in the foreclosure market.

1. How do you find foreclosure properties for sale?

On the Internet
In newspaper ads
Through a real estate agent
All of the above

2. True or False: You can usually buy a foreclosed property for less than its market value.

True
False

3. There are three stages of the foreclosure process: pre-foreclosure (when the owner still owns the property), auction and bank-owned (when the lender owns the property). At which stages can you buy properties?

Pre-foreclosure and auction
Auction and bank-owned
Auction only
Pre-foreclosure, auction and bank-owned

4. True or False: Foreclosure properties are not sold in "as is" condition.

True
False

5. If you want a house to be a wise investment, it's good to have it inspected. But if you're buying a foreclosure, which stage typically provides the slimmest chance for you to do that?

Pre-foreclosure, because there is still time for the borrower to prevent the foreclosure.
At auction, because the owner still has possession of the house and may not want to let you in.
When the bank takes ownership of it, because the property is at the end of the foreclosure process and is in the bank's hands.
All stages provide an equal opportunity for inspection.

6. When you buy a property that’s in foreclosure, are you only paying for the price of the home, and not the debt associated with it?

No, you also have to pay the debt.
Yes, it’s a clean deal, which is why foreclosures can be good bargains.
It depends on the foreclosure stage the property is in.
Yes, the attorney helps negotiate that.

7. Which foreclosure type do experts say is the least financially risky for first-time buyers?

Pre-foreclosure, because you often negotiate directly with the owner.
Auction, because that’s where you can score the best discounts.
During the bank-owned stage, because banks assign the property to a licensed real estate agent to sell it.
B and C

Copyright © 2008 University of Maryland Philip Merrill College of Journalism

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