Foreclosed homes can be a great way to enjoy a great home or terrific investment for many people. While it is a myth that you can always buy foreclosed homes for pennies on the dollar, you can still find very good bargains, with some foreclosed homes selling for as much as 10-40% off the market value of the foreclosed home.

Where Do Foreclosed Homes for Sale Come From?

Foreclosed homes are usually the result of unemployment, divorce, or death.

When these things occur to the average homeowner, if he is not prepared, he may get so behind in mortgage payments that the lender decides to foreclose the property in order to get their money back. Then the lender takes over legal possession of the foreclosed home, has it appraised and puts it up for sale.

The problem is that there are so many foreclosed homes on the market, appraisals are hasty and under-appraisal is common. The professionals in charge of appraisals may have to appraise dozens of foreclosed homes in a day, so mistakes occur frequently. In order to ensure that you get the best deals on foreclosed homes for sale, therefore, it is very important that you do your research well. You will likely find some foreclosed homes that have been over-appraised. However, if you keep looking, you will likely find foreclosed homes that are under-appraised and are being sold for far less than the market value. These under-appraised foreclosed homes can be a great investment.

What Are the Benefits of Foreclosed Homes?

For investors and homebuyers, foreclosed homes:

• Are a great way to buy homes. Foreclosed homes often allow you to buy a more costly or valuable home than you could otherwise afford.

• Are great way to build equity. Since foreclosed homes may be sold under market value and in some cases and require some minor repairs, you can build equity very quickly on them.

• They are fast and inexpensive to buy. Government agencies generally pay the real estate agent