First time homebuyers who are on a tight budget can benefit a lot from foreclosed properties. Foreclosed properties usually sell at 65% to 85% of its original price. Most of these foreclosed properties are still in good conditions although they may look dismal at first glance. Usually, the problem with these foreclosed properties are just on the paint job, the overgrown garden and the accumulate dust and dirt. Other than that, you can be rest assured that the roof will not fall on you while you sleep.

No, where should one start looking for foreclosed properties? The best place to start looking is at the county recorder’s office. The county recorder normally records all documents regarding real estate transactions, including foreclosures. The records of the country recorder are public documents so it is open to all so can just request for the file and browse through them. Now, you might ask how you could identify foreclosed properties in the record. Actually, its fairly easy, all you have to do is look for those, which are recorded with a Notice of Default or a Lis Pendens. Now, a Notice of Default is usually served in cases of non-judicial foreclosure. Note that foreclosed properties are those used a security of a loan. The moment that the debtor defaults in payment, a notice of default will be served to him or her. The country recorder will also record the Notice of Default. However, properties with Lis Pendens could be a little more complicated since a Lis Pendens simply means there is a pending Court action on the property. You will need to verify wit the Court regarding the Lis Pendens to ascertain the real status of the property.

For people who are planning to buy their first home, real estate foreclosures could be a good place to start. For first time homebuyers, this can be a good opportunity to find not so expensive properties. Usually, foreclosed properties are sold as is, meaning, the prospective buyer shall take care of all repairs and restorations needed on the property. At first glance some of these foreclosed properties do not really look much. Most of these have fallen into a state of distress with the paints peeling off, the walls and the roofs have been overgrown with vines, or the porch sagging and so on. However, with some efforts, one could easily turn this property around.

One of the attractions offered by foreclosed properties is the sudden increase in its value after it had been cleaned up and minor repairs have been done. This increase in value is often referred to as sweat equity or the “profit” that the owner derives from the simple increase in the value of the property. However, in order to make the most of “sweat equity” one should learn the art of evaluating the repairs needed before purchasing the property in question. One of the first considerations you should take is that whether or not you can do some of the restorations yourself and save on cost. Make sure that the interior portion of the house is intact and no major repairs are needed. If that house itself can survive for the next couple of years without major repairs, then you have a good bargain.