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How to Invest in Foreclosures The Right Way

Many people avoid foreclosures like the plague, but if done right, they can be a great investment.

Homeowners often find themselves in a foreclosure situation when they are stuck paying a monthly mortgage payment for a house that is no longer valued at the price they are paying. This can happen for multiple reasons, but the most common is a change in the local or national market.

When you buy a foreclosed house, you are offered better financing than what the house cost when it was originally purchased, which is why it has the potential to be such a great investment option.


However, it’s important to avoid foreclosure auctions. While you might find the lowest prices, you will also be taking the biggest risk. At these auctions you won’t have a chance to inspect the house beforehand, and it also might have liens filed against it for outstanding tax payments that you could be held responsible for. Paying these liens will diminish the potential savings you might have gotten through the auction.

If you’re serious about investing in foreclosures, the best option is to buy a foreclosure through a bank. These houses have already gone through the foreclosure process and the bank has paid any liens. You will also have a chance to fully inspect the house before purchasing it.

Last but not least, it’s crucial that you hire a real estate agent who has experience with foreclosed properties. These agents will be able to identify key risk factors, as well as positive traits in foreclosed properties. For more information, feel free to contact a broker at Castles Unlimited or call 617-964-3300.