Buyers often shy away from foreclosed home listings but they are not that different than any other offering. As long as you understand how to deal with them, you can snag a great bargain by checking out a home that is about to be foreclosed or that has already been foreclosed. To find out how to deal with both of these situations, read on.

The Home Is On Its Way To Foreclosure

Once a home is owned by the bank or other parties, it can get a bit more complicated. If you catch a distressed owner before they lose the home, you could get a deal on a home that is in better shape than one that has sat empty for a while. Homeowners who are beginning to fall behind on their mortgage may want to avoid the blow to their credit that foreclosure is sure to bring and are, consequently, eager to make a deal just to get out from under the current situation. Here are a few caveats to keep in mind when you find a home like this:

• Cash may be needed if the seller is behind on their payments.
• You will need to act fast so have your lending preapproved and ready to go.
• Talk to your real estate agent about the selling price. It needs to be low enough to get financing after an appraisal.
• A home inspection is important here since financially-distressed sellers may not be attending to home maintenance issues properly.
• Make sure you know about liens. Liens may be in place if the seller has other financial issues and those must be cleared before you can close.

The Home Is Out Of The Seller's Hands

Most banks and lenders hate to deal with foreclosed homes and may sell (or contract out) the property to an auction company. Don't try to "win" an auctioned home without making the following checks:

• Auctioned homes are often not open for viewing. You can peek in windows and look at photos on the listing site, however.
• The longer a home has been unoccupied, the greater the chances for damage and theft. You should expect the home to lack appliances and sometimes even basic items like a toilet. Vandals and squatters are also possible.
• Most auction companies make up for the low home prices by charging buyers a premium, which a parentage of the winning bid. You will need some cash and approved lending within a short amount of time after the sale so be prepared.

To make the best of a foreclosed property sale, talk to a real estate agent. They often have inside information about upcoming listings by distressed sellers and about auctioned single family homes.