If you are looking for a house to live in, it is always advisable  to buy the property you like rather than to look for a great foreclosure deal. However, it is always a bonus if you can find a property that fits both criteria.

There are several ways to buy a foreclosed property, all of which have their own pros and cons. Some could give you the highest financial gain but with the highest investment risks while others could place you on a safe playing ground but with the lowest financial benefits.

Let's talk about buying a pre-foreclosed property. This method will give you the least amount of money output with the highest available information on the property. Pre-foreclosure happens during the first few months of foreclosure (more often than not 2 to 3 months after the first default). Usually, the bank or the mortgage lender will allow the homeowner to sell the property to help him come up with money to pay off the mortgage default. The "sale by owner" is a medium for the homeowners to prevent their properties from being foreclosed. In most cases, this is done by owners who see sale as their last option and by those who have high equity on the property.

This method, unlike the other two methods, gives you the least risk in terms of the condition of the house. You are free to inspect the house and to make your search for the title deeds. You could also uncover all liens if you like and know the underlying problems. Usually, a real estate broker or the owner of the property will show you the house. If you are interested and you have the money to buy the property, the owner will sign you a deed and will handover the property.

In exchange though, you will get hold of the mortgage that will come with the house. In short, you will have to make the mortgage payments current along with all the fees and charges that come with the property. You will also be left with upgrading and repairing the house.

Some states give the original homeowners a redemption period though. This allows the previous homeowners to get back the property during a certain period of time, usually several months up to a few years, to buy back the property. Thus, all the investments of the current homebuyer will be invalidated.

Buying a pre-foreclosed property is actually safe if you are talking about checking the entire condition of the house but if you don't want the financial responsibilities that go along with it, this method of buying is not really an option for you.

Homeowners facing the prospect of foreclosure are often tempted to vandalize the home and strip out the fixtures and fittings. Unfortunately this is the reality in many instances and prospective buyers of the foreclosed property have to contend with a property that has been trashed.

Stripping a property of its fixtures and vandalism are against the law. But this doesn't keep the previous homeowners from smashing the glass windows and doors of their foreclosed house or from tagging the walls. Acts such as these are unforgivable and have repercussions that many distraught homeowners choose to ignore.

Such people think that they can take their revenge on the banks that foreclosed their houses. But what they don't understand is that they are not hurting the bank or their creditors, instead they are hurting themselves. Vandalism is illegal and it is punishable by law. If the house has a homeowner's insurance, the bank will surely submit an claim to the insurance company to help cover the damages and compensate for the missing real property fixtures. (Please take note that house fixtures such as cabinets, countertops, electrical wirings, vents, air conditioning, doors, copper pipes, and other built-ins are considered as fixtures. Any damage done to these mustl be accounted for.)

The home insurance company would then go after the previous owners  of the property and collect their losses. Like all types of insurance companies, a home insurance company is relentless and would stop at nothing to  in order to get its compensation. Ultimately even though it may seem to be very satisfying to trash the home it will end up costing you in the long run.

Investing in a foreclosed home entails with it some risks that are inevitable. But this does not negate the fact that it is quite gratifying especially if you were able to find a great deal. But great deals are quite hard to find and will require you to do considerable research. If you are interested in a foreclosed home, ensure yourself that you are backed with secured information so you won't be surprised by whopped fixtures in the house once you decided to move in.

Statutory Redemption

After foreclosure the borrower has a period during which he/she may attempt to regain ownership of the property. In many states this right is guaranteed by legislation, and could be up to 1 year in most States, if the borrower is able to pay the amount that the property was sold for at auction then he/she will be allowed to keep the property. This period is referred to as the statutory redemption period.

In States that provide statutory redemption, the borrower may continue to live on the property during the statutory redemption period after foreclosure. If after the statutory redemption period the borrower has not redeemed the property the purchaser at the foreclosure auction gets possession and the title deed to the property.

States that provide for statutory redemption usually have higher foreclosure sale prices, which benefits both the borrower and creditors whom have an interest in the property. In States without this protection such as Texas for example all foreclosure sales are final.

In the Sates with such statutes, where mortgagors(borrowers) may redeem property after a mortgage foreclosure, the states have allowed statutory redemption in order to drive up foreclosure sale prices; this benefits both the defaulting mortgagor and his creditors who have obtained an interest in the property. The mortgagor is given an opportunity to match the sale price. This often has the effect of causing potential buyers of the foreclosed property to adjust their bids.

In a State without such a statute, such as Texas, this statutory right of redemption does not exist, and this means that all foreclosure sales are final, unless the courts overturn it on procedure.

Equitable redemption

Equitable redemption is a common law concept arising out of judicial opinions. It grants the borrower the right to reclaim the property by catching up all arrears mortgage payments, at any time prior to foreclosure. The major difference between statutory redemption and equitable redemption is that statutory redemption begins at foreclosure while the right to equitable redemption ends at foreclosure. All state courts recognize and uphold a borrower’s right to equitable redemption.

If you are currently facing home foreclosure it is important that you know what the Laws in your State are and what your rights are in terms of these Laws. Consider consulting a Professional who knows the foreclosure Laws applicable in your State as well as the practices of various mortgage lenders and may be able to negotiate on your behalf and help save your family home.

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