Pre-foreclosure can usually be purchased with conventional financing if time allows. You can contact the seller's lender and trustee with the seller's written consent and ask for a postponment of the trustee sale if more time is needed to obtain your financing and close.

If you are purchasing at trustee sale, in Maricopa county, Arizona, you need $10K cashiers check or cash to bid at the sale. If you are the successfull winning bidder, you have until 5 pm the next business day to come up with the balance. Most buyers at auction will use hard money to purchase and then refinance out at a later date. This can be risky especially if you havent' had an opportunity to inspect the home entirely. The sale is completely AS-IS.

If buying after the trustee sale, once the property becomes an REO, bank owned home, you can have more time to inspect the property as well as obtain convetional financing.

Hi Sherri,

It does depend on what juncture in the foreclosure process the home is in. I have found that bank owned properties (after the foreclosure process has been completed and now the bank owns it) are pretty simple to deal with. It's just like a regular transaction, just a few more forms to fill out. Those can be financed as well as short sales. If you are buying on the courthouse steps at auction, at least here in Arizona, you have to have 10% cash on hand, then you must come up with the remainder within 10 days. Most people will use a hard money lender to fund the purchase temporarily then refinance with a conventional loan.

It depends on which stage of the foreclosure process you are trying to purchase the home.
If the homeowner has defaulted on their loan and has negotiated with the bank the sale of the home, it's typically a short sale. A short sale can be financed.
If the home is being auctioned by the county. Then it is generally an all cash deal and you are responsible for evicting the previous homeowner.
If the bank has taken ownership of the home and evicted the owners, then its called an REO and you do not need to pay all cash.
All of these types of transactions are fraught with tricky contracts. You should consider hiring an attorney to keep you informed of your rights.

If you plan on buying a foreclosure from the sheriff at the sale you will need cash. If you work out a deal with the homeowner that has a home foreclosed on you can probably finance it.