Not all foreclosures are created equal. The answers you have received already assume that you are talking about properties that have already been foreclosed and have gone back on the market as an REO property (now owned by the bank who foreclosed) and have been listed with an agent. That is generally where you will find the lowest risk opportunities in todayâ€™s market.
If you are talking about getting into a house that is being foreclosed and will be sold at auction on the county courthouse steps on the 1st Tuesday of each month, it is totally different! Generally you will not be able to get into the property prior to the auction sale because it is still owned by the party being foreclosed. That person may or may not have it listed for sale prior to the foreclosure sale (trying to sell it themselves and avoid foreclosure).
I would caution you against trying to purchase a true "foreclosure" at the 1st Tuesday auction. This process can be very risky. In this case, you would have to do title work on your own prior to bidding for the house to determine any title issues in advance. These foreclosure auction sales are also on a cash basis, so you have to come with a big certified check- no loans allowed! You may also end up having to evict the people who are being foreclosed on. If you can't gain access to the property prior to the auction, you risk potential problems with the property that might have been revealed by an inspection. All these issues can be time consuming and costly.
In today's market of quite a few REOs, your best bet lowest risk option is to look at the properties after they have been foreclosed and put back on the market by the bank. There are lots more of these opportunities out there than there were in the past. These kinds of deals used to jump off the market quickly and were more difficult to have a chance at. The best condition and best priced ones still do, even today, so it is important to keep tabs on the market daily or have someone doing it for you to get the best opportunities. It is not uncommon even in todayâ€™s market to have multiple offers on the best of these REO properties, so you need to have your act together and have an agent who can help you navigate the process with the best chance of getting your offer accepted. Generally the banks have already evicted (if necessary) the people who have been foreclosed. In the current market, some banks are even making repairs to the property and offering other incentives such as low interest financing to try to move their bank owned properties. The state of Georgia is even using "stimulus" money to encourage the purchase of some of the less desirable foreclosures out there. The Georgia Dream program offers a $14,000 grant (free money!) to income-qualified buyers who purchase a foreclosed home in Georgia. Don't forget the tax incentives too- Georgia recently passed a home buyer tax credit of $1,800 for all home purchases this year, and the federal tax credit of $8,000 is still available to first time buyers or buyers who have not owned a home in 36 months.
Financing is certainly not as easy to get today as it was just a year ago, but it is still out there. If you have good credit and verifiable income, you probably can get a loan. It is really important to start that process early though- even before you find a house. It can take even a good loan officer a few days to determine if you can get financing in todayâ€™s volatile market, so start early. You need to be prepared to jump on the right opportunity when it comes along and not have to be fumbling around to figure out if you can get financing. Be prepared!
The bottom line is that there are lots of really great opportunities out there today if you know how and where to look for them. In some cases you can combine tax credits, incentive grants, below market prices and below market financing offered by the owner-banks to create one unbelievable package! Arming yourself with patience, knowledge and persistence can pay off in a great deal on a good opportunity!