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Foreclosed homes can offer a potential homebuyer or landlord or even a land developer an excellent opportunity in property gained cheaply. There are a couple different types of foreclosure. The first is the traditional, or judicial, foreclosure; the property owner fell behind on payment to the mortgage company and they(the mortgage company) pursue through the state's court system the full acquisition of the property. The second occurs when the owner fell behind on the property taxes owed to the local municipality and is then auctioned off by the local sherriff's department. (Other types of foreclosure exist, but are limited to a few states.) Usually both types of foreclosure occur simultaneously as the owner cannot pay either the mortgage or the property taxes. Neither are good for the previous owner but can be quite the treasure for the buyer of foreclosed homes.
Buying foreclosures is a waiting game. The original owner can suddenly snatch the property back by paying what is owed, and then one has to wait to see if that sticks. The buying and waiting game is best played if you wait on a couple of foreclosures at once. Buyers have to have the income to purchase one or all of the foreclosed homes on which they have a bid or wish to place a bid.