To echo what the previous poster just said, I personally did that when I went house hunting... I went shopping with a mortgage "commitment" in-hand (since I specialize in this type of financing, it only made sense for me to take my own advice =) and sellers greeted me with open arms, even though I was doing a renovation loan. If you have the patience, this is a good way to go but if you just found the right property, proceed as you normally would.

I won't reitterate what has been said already but I will emphasize this. For a bank owned property, if you show up with financing in hand from another lender, you'll be in a much stronger position than if you try to explain that you plan on getting financing.

Rita,

The answer to your question is, it depends. Are you referring to a Bank Owned ("Foreclosed") home or are you referring to a property in Foreclosure that is being auctioned off at the Courthouse Steps by the Lender? If the home has been Foreclosed on already and is now "Bank Owned" (also called REO) then you may obtain traditional financing. If you are trying to buy a home at the Lender Foreclosure Auction, then as Jonathan notes below it will vary by State. In Georgia, it is "Cash and Carry".... meaning if you are the winning bidder on a $100,000 homes, you will have to pony up a $100,000 Cashiers Check at the auction.

For more information of the Stages of the Foreclosure process, check out my blog post on Foreclosures:
http://www.trulia.com/blog/staceywyatt/2009/09/foreclosures_deal

Rita,

I'm assuming you're talking about buying a bank-owned property being sold on the market. If so, then you would get a loan and purchase the property the same way you would a traditional resale. How much money you put down depends on the type of loan you get not what type of property you buy.

Danilo

This is a very good question and one that is answered in the Statute's for the state you are purchasing a foreclosed property. The laws govern the terms of sale. In my state of Florida, a certified check in the amount of 5% of the eventual purchase price must be presented in order to bid on a property and, if successful in having an acceptable bid, the balance must be paid via a cashier's check by 2 PM the day of the sale. Therefore, in Florida, one is unable to obtain financing to fund the purchase of a property at the foreclosure auction.

In the event there are no successful purchasers at the foreclosure auction, the lienholder will acquire the property at which time it becomes a REO property and one that can be acquired through financing.

Good luck in your home purchase.

One thing I forgot, not all foreclosures are in "less-than-perfect" condition, it just happens that it's the case more often than not. If find a property in great shape that's a foreclosure, you'll probably be up against a lot of other bidders as a couple other posters have already mentioned... Every situation is different of course, talk to your agent about your specific transaction.

You'll find a lot of good advice there and if you don't have an agent already, you should consider calling one of the knowledgeable agents who reply to your thread.

Good luck with your hunt!

Good Afternoon Rita,

All Foreclosures do not require cash instead of financing, some may be in such bad shape there is no financing available but in most cases you can get a mortgage. You should however be pre-approved prior to writing the offer and submit your pre approval letter with your your offer. Godo luck with your search.

The large majority of bank owned properties will accept offers with financing. The exception is when a property is in a condition that financing will not be possible. For example, if the property was repossessed in the middle of a remodeling project and the entire kitchen is gutted. A lender may not approve financing for a house in this condition. Usually, in these cases the bank will specify "cash only" in the listing.

As I said, almost all bank owned properties will accept financing though.

Most foreclosed homes can be purchased with financing.
Yu need towork with a good lender who will make sure he/she gets u a committement letter and/or approval letter from a direct lender.
Rgds,
Ramesh Chandra
703 635 8209
mepcigroup@gmail.com
Saab Realtors Corporation

Rita,

Please note that all foreclosures do NOT require that you be a cash buyer. Often times, the listing agent doesn't know that there is financing available for properties in less-than-perfect condition (these same loans can be used to upgrade a perfectly habitable home as well).

Please refer to the post I just wrote, I think you'll find many of your questions are answered:
http://www.trulia.com/voices/Financing/unacceptable_property…

In the above post, I also have a link to an online version of a published article I did about Renovation Financing that I think you'll find very helpful (It was for a Realtor magazine but you'll get plenty of good info out of it as a consumer also).

Long story short, the updates that you want done on the property can all be rolled into the loan. There are rare occasions where these loans won't suffice and you have to have a construction loan or a cash deal but the majority of properties you find can be closed on with a renovation loan (if the seller will allow for it of course).

Check out my profile and the other posts I've done (there are 50+) and you'll get all the info you're seeking on rehab financing (or "Financing a Foreclosure" as I title a series of my homebuyer seminars).

If you need additional questions answered, you can find my info by clicking on my profile.

Hi Rita,

Foreclosures can be, and very often are, financed - it's not necessary to pay cash. However, if the property you're looking at is very well priced and attracts multiple offers you're probably going to be competing with some all-cash investors. Don't let that dissuade you, though ... foreclosures can be great deals if you have the perseverence (and the right agent!). Let me know if I can help.

Absolutely you can get financing to purchase a foreclosure or REO property. However, this will vary per each individual situation. For example, at a lower price point (under $400,000) you may be up against aggressive competition from investors who are able to pay all cash and this will be a more secure option for the seller (bank or trustee) involved. Additionally, some REO sellers may request you qualify with their lender prior to submitting a contract but they cannot force this. Please let me know if you have any further questions and I will be happy to answer them. Regards, Jay Lindsey, jay@jrlgrouponline.com.