Many buyers that I meet ask about buying foreclosure homes.  Buying a house at a foreclosure sale is complex transaction and not been very common until recently.  Every state is able to set their own rules regarding foreclosures, so a buyer needs to study the laws of their state.  Wyoming is a “mortgage” state.  This means that when an owner stops making payments (defaults) on a loan, the lender needs to print notices in the local newspaper a number of times saying that they are foreclosing on a property.

On the day of the foreclosure, buyers need to bring certified checks to the sale.  If a buyer does buy the foreclosure, the process is not necessarily over.  The previous owner has a right of redemption, so if they can come back within 90 days, they can repurchase the property if they pay the property taxes and 10 percent interest.  Although it is unlikely that a previous owner can come back with money to redeem the property, it does happen.

If no one bids on the property, the lender takes title to the property.  After 90 days, the lender will own the property.  The lender typically does not want to own property, so the lender either will list the property for sale with a real estate agency or will take offers from potential buyers.  These properties are called REOs (Real Estate Owned).  Buyers that are interested in purchasing REOs need to realize that the sales decision is being made by a lender that is typically a corporation.  The decision making process on the part of the lender is typically much slower than if the seller is a typical homeowner.  Buyers may be required to be pre-qualified for a loan and provide documentation when they submit an offer.

A buyer that is interested in foreclosed properties may be able to find a great bargain, but also needs to know that they need to be willing to do the work to learn about the property, and also be ready to work with a lender that may appear to be slow in responding and making a decision.