Foreclosed, up for auction. Is it a good investment?

[Harry Burgos]

Hey everyone, I’m studying for my real estate exam in CT and have found a foreclosed home in Norwalk. I’d like to dig into and see if it a good investment opportunity. I have two investors interested in properties in CT but I’m not sure how to evaluate this and bring it to their attention. I don’t even have the money for a title search at the moment and was told I should find out if there are any liens on the property before anything. Can someone please help I can’t think clearly and I‘m flipping through my exam book trying to find answers.

[Ned Carey]

@Harry Burgos how did this property come to your attention? Foreclosure is a term that can be interpreted several ways.  a property can be "In foreclosure" which means a foreclosure has been started but the process is not completed. 

There could be a foreclosure auction, which is done as the last step of the foreclosure. This is typically done on the courthouse steps. The bank usually bids the amount they are due and if someone else bids more they get it. Otherwise it is sold to the  bank. 

A property could be "Foreclosed" meaning the foreclosure process is done. Normally if that term is used it means the bank owns it. It is then called an REO for Real Estate Owned by the bank. REO properties are virtually always listed with and agent to sell them.

People can still  be in there even after the foreclosure auction. The winning bidder in the auction has to follow the legal process to remove the occupants. At any time in this process the property can sit vacant for a long time.